Exchange takes regulatory lead

The Stock Exhange yesterday announced the appointment of its first board member in charge of regulation in a bid to boost its profile in this increasingly controversial domain.

At a time when regulation in London has come once again under a critical spotlight amidst calls for a streamlining of the numerous regulatory bodies, Richard Kilsby will take responsibility for presenting the exchange's case both at home and abroad. "The best form of defence is to get out there and be in the forefront," said Mr Kilsby, 43 years old and previously a managing director with Bankers Trust.

"We felt the need to raise the profile of the London Stock Exchange as a major world-wide exchange and its profile as a regulatory authority." From early September he will be consulting with all its main users, including members, big corpor- ations and institutions.

Previously, responsibility for regulatory duties such as listing, market supervision, surveillance and membership has been done by separate division heads. For the first time, they are to be brought under the aegis of a board-level head. "The Exchange needs to take a leading role in the European and international discussions on regulatory issues, and to do so it needs more senior-level resources," said Mr Kilsby.

London is special among major international exchanges because of its additional responsibilities as regulator, part of a wider regulatory framework for financial services that includes the Bank of England, the Department of Trade and Industry, the Securities and Investments Board, and the three self-regulating organisations under its umbrella. One of Mr Kilsby's key jobs will be to head off growing complaints that this fragmentation is undermining the effectiveness of regulation in London and harming its standing as an international financial centre. There have been increasing signs of jockeying for position among the regulators as well as public criticism of one another, as fears grow that the winds are blowing in favour of reorganising the system, creating a single, centralised regulator.

"The London exchange is in a unique position, and it needs to capitalise on this by being a good regulator and being a cheap and efficient place to raise equity," said Mr Kilsby. Rather than focusing on the Stock Exchange's regulatory duties, he said, the critical debate should be about the overlap of responsibilities between the pure regulators, the SIB and its three SROs.