FSA chief quits after boardroom rift

RICHARD FARRANT, the chief operating officer of the Financial Services Authority, is in line for a pounds 370,000 pay-off after a boardroom rift at the City watchdog which will result in his leaving in January.

Mr Farrant, the former chief executive of the Securities and Futures Authority, is the highest ranking casualty since the organisation began operations in June.

One of three managing directors sitting on the board below chairman Howard Davies, he is only 15 months into a three-year contract and was on a salary of pounds 210,000 a year.

His departure will almost certainly be seen as as sign of the tensions with the FSA as Mr Davies seeks to weld the various organisations which it has replaced into a single regulator.

Mr Farrant had a front-line role at the FSA and was instrumental in ensuring that senior management at Barings were held responsible for the failures that led to the bank's collapse.

However, he was widely perceived as having lost out to the more charismatic Philip Thorpe, the New Zealander who ran Imro, the Investment Management Regulatory Organisation, when the top jobs at the FSA were shared out.

While Mr Thorpe now heads the enforcement division which will be responsible for disciplining those who fall foul of the FSA's tough code, Mr Farrant was given a less glamorous organisational role, which now will be eliminated by the boardroom reshuffle..

Mr Farrant said yesterday that following the FSA's move to its new premises at Canary Wharf and the completion of the initial phase of staff recruitment his job had been largely done. He said that he and the FSA chairman had been discussing for some time the possibility of moving into a new role handling the next stage of integration.

However, he had decided particularly in view of his experience when the old Securities Association merged with the Futures Association to create the SFA, to step aside.

Mr Farrant , 53, said that he had no other job to take up but would probably seek to remain within the financial services industry.