According to the FSA, Ms Coleâs appointment, which was originally announced by HM Treasury, will take effect immediately.
She has been responsible for leading the bodyâs crackdown on market abuse through its âcredible deterrence strategyâ, the organisation explained.
During the last 12 months this operation has led to a total of Â£33.6 million worth of fines being levied alongside three criminal convictions made for insider trading.
Hector Sants, FSA chief executive, said: âMargaret has driven the FSAâs strategy of credible deterrence over the last three years, building the in-house expertise, intelligence gathering tactics and litigation specialism, used to ensure we achieve our statutory objectives in respect of protecting consumers, market integrity and financial crime.
âHer leadership and management skills have been critical to the strong progress we have made.â
Ms Cole joined the FSA in 2005 following 20 years worth of experience working within commercial litigation.
The coalition government is expected to split the FSA during the next two years, dividing its responsibilities between a new consumer protection agency and a unit devoted to prudential supervision.
By Jim Ottewill