Correspondence & Enquiry Unit
1 Horse Guards Road
London
SW1A 2HQ
Public.enquiries@hmtreasury.gsi.gov.uk
Mr Tom Warren
Tom.warren@buzzfeed.com
7 October 2016
2. Dear Mr Warren
3.
4. Thank you for your letter of 6 October. We understand you have also contacted
officials named in your letter in relation to their role at HM Treasury. As you would
expect, we are responding as their employer at the time.
5. In your letter you have made a number of imputations against HM Treasury (HMT)
and HMT officials of the utmost gravity. I would like to state at the outset that these
imputations are completely incorrect, and HMT refutes them in the strongest possible
terms, both on its own behalf and that of its staff. At all times, staff acted in accordance
with established policy and procedures set out by HMT.
6. Having considered your letter carefully, it is clear to us that you have misunderstood
the nature, purpose and content of the emails between HMT and the Financial Conduct
Authority (FCA) to which you have referred. To clarify, as part of the sales process for
government-owned shares undertaken by UK Financial Investments (UKFI) on behalf of
HMT, a formal legal review is undertaken (as would be the case with any institutional
seller of shares) to ensure that HMT is compliant with the Market Abuse Regulation
(MAR), as it applies to the possession of inside information. There is also a public
interest case for ensuring that HMT is not acting in a way that would result in private
investors and individuals being unfairly disadvantaged by acquiring shares in a
government sale.
7. As a public sector body, the FCA falls within the scope of UK public authorities. There
are specific information sharing gateways established in the Financial Services and
Markets Act 2000 (FSMA), which allows for, and in some cases requires the FCA to
disclose confidential, regulatory information to HMT for reasons of financial stability,
and/or to allow HMT to carry out its stated public functions.
8. Given the existence of these information sharing gateways between HMT and the
FCA, HMT discloses to the FCA the timing of any proposed share sales. HMT
specifically asks the FCA whether there are impending announcements within that
timeframe that would impact on share prices. In the event that the FCA confirms that
they intend to disclose potentially price-sensitive information in that timeframe, we
withdraw our intent to dispose of shares, allow for the FCA to publish that information,
and then consider proceeding with disposals after that event to ensure that investors are
fully aware of any information that would impact on their investment decision.
9. This is a long standing process that was established following thorough engagement
with legal advisors, and has been in place for all share disposals undertaken by HMT to
date. Its purpose is twofold: to ensure strict legal compliance by HMT in its conduct of
share sales, and to provide the public and markets with an additional level of assurance
for their investment decisions.

 10. It is important to emphasise that the email correspondence to which you refer is an
instance of HMT acting to secure compliance with its legal obligations and to secure
additional protection over and above this to markets and investors. In that light it would
have been wrong for HMT not to have engaged in this correspondence with the FCA at
the relevant time.
11. Specific to the case of RBS share sales, the FCA confirmed that it did not intend to
release information regarding RBS within the specified timeframe for our share sale, and
noted the potential that an announcement may occur between August and November of
that year. The FCA did not share any information relating to the content of that or any
other announcement with HMT. We therefore proceeded with a sale of RBS shares as
planned.
12. Your letter separately sets out a number of imputations that HMT and HMT officials
sought to unduly influence both the FCA and Dr Lawrence Tomlinson. HMT emphatically
denies that imputation.
13. The accusations against RBS and particularly against the GRG division are very
serious, and it is right that the FCA is investigating the issue thoroughly. However, there
is a strong public interest for the review to be completed in a timely manner. HMT has
received representation from Parliament and members of the public on this issue, and
so it is entirely appropriate for HMT to enquire on the timing of the investigation on
behalf of Parliament.
14. HMT is on record for making enquiries to the FCA regarding the expected timing of
the review, and has published a number of letters between HMT ministers and the FCA
to this effect.
15. The FCA has never shared any information regarding the content of the investigation
with HMT, other than the expected timing of the conclusions. To be absolutely clear,
HMT does not hold any information and has never sought any information regarding the
ongoing investigation by the FCA, other than the expected timing, which is a matter of
public record.
16. Neither HMT nor any of its officials have ever expressed a view to the FCA regarding
the outcome or content of the ongoing investigation. The ongoing investigation falls
solely within the remit of FCA.
17. For completeness, the career decisions taken by John Kingman and Martin Wheatley
are issues entirely for those individuals, and we would therefore state that these two
issues are entirely separate. As set out in this letter, we refute any accusation of
wrongdoing of any kind by individuals or HMT.
18.
Yours sincerely,

HM Treasury