The resignation has surprised many and cast doubts over the future of the FSA. The Conservative Party has announced it will disband the FSA and hand over its banking supervisory powers to the Bank of England. Many expect the Tories to win the election, and have reportedly spoken to Sants about taking on the role of deputy governor at the Bank.
The former investment banker joined the financial watchdog from Credit Suisse in 2004, becoming chief executive in July 2007. He is credited with steering the FSA through the credit crisis.
Political leaders as well as City analysts say Sants' resignation has come at a crucial time for the Authority. FSA chairman Lord Turner admitted in a memo to staff that the development was unsettling, "particularly in the run-up to the general election". There are now concerns if Lord Turner would wish to continue remaining in his position at the regulator.
The FSA said Sants had long stated his intention of holding the job for only three years, but it did not outline a succession plan. A spokeswoman said a successor would be selected by the FSA's board and the Treasury, in due course.