Martin Wheatley is to step down as Chief Executive of the Financial Conduct Authority (FCA) effective 12 September 2015
The resignation comes after George Osborne confirmed that Wheatley's contract would not be renewed in March 2016, once it ends.
Several news outlets have reported that in a statement, Osborne commented in order to move forward, the FCA needed 'new leadership'.
Osborne added: 'Britain needs a tough, strong financial conduct regulator. Martin Wheatley has done a brilliant job of launching the FCA in tough circumstances.
'Now that phase is complete, the government believes that different leadership is required to build on those foundations and take the organisation to the next stage of its development.'
Wheatley will continue to act as an adviser to the FCA Board until 31 January 2016 with a particular emphasis on the implementation of the Fair and Effective Markets Review, which he co-chaired.
ICSA Policy and Research Director Peter Swabey commented: 'Leadership of the FCA should not, in my view, be a political appointment and I hope that whoever replaces Martin Wheatley will demonstrate an appropriate level of independence and, more importantly, backbone when addressing issues of corporate misbehaviour.'
Swabey added: 'Leading the FCA through a period of market turmoil was never going to be easy... Wheatley has been criticised in some quarters for being too interventionist and in others for not doing enough, and perhaps the final straw was the FCAs apparent disagreement with the Treasury around pension reform.'
Tracey McDermott will take over as Acting Chief Executive from 12 September while the search for a permanent Chief Executive takes place.
Martin Wheatley began his time at was initially the Financial Services Authority as Managing Director of its Consumer and Markets Business Unit. When the regulator was re-established as the Financial Conduct Authority (FCA), Wheatley became Chief Executive.
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