Correspondence

Dame Elizabeth Gloster to John Glen: 1 June 2020: HTML

Updated 11 September 2020

This was published under the 2019 to 2022 Johnson Conservative government

                                                                                                                                       As from: One Essex Court
                                                                                                                                       Temple London
                                                                                                                                       EC4Y 9AR 

John Glen Esq MP Economic Secretary HM Treasury 1 Horse Guards Road London SWIA 2HQ

By email (action.est@hmtrcasury.gov.uk / john.glcn.mp@parliamcnt.uk)

1 June 2020

Dear Mr Glen

Re: Independent Investigation into the Financial Conduct Authority’s Regulation of London Capital & Finance plc

As you are aware, pursuant to your Direction dated 22 May 2019 (the “Direction”), 1 I was appointed by the Financial Conduct Authority (the “FCA”) as the Investigator (as that term is defined in the Direction) to investigate) to investigate the relevant events relating to the regulation of London Capital & Finance pie (“LCF”). The investigation is required to “focus on whether the FCA discharged its functions in respect of LCF in a matter which enabled it to effectively fulfil its statutory objectives.”

Paragraph 7( I) of the Direction requires my investigation to be completed “within a period of I 2 months’· from the date on which I was appointed. I was formally appointed by the FCA on 10 July 2019, and, accordingly, the deadline for the delivery of my report was IO July 2020. Paragraph 7(2) of the Direction states: “If the investigator considers that it will 1101 be possible to complete the investigation within the period of 12 months mentioned in [paragraph 7( 1) of the Direction], the FCA must inform the Treasury of (a) the reasons for the delay in the conclusion of the Investigation, and (b) a revised target date for the conclusion of the Investigation.”

Following my previous discussions with you regarding my investigation, I wanted to let you know that I recently informed the FCA that I have determined that it will not be possible to complete my investigation by 10 July 2020 and that the revised date for delivery of my report is 30 September 2020. As you will appreciate, the decision to extend the time line for completion of my investigation is not one I have taken lightly given the potential anguish this may cause amongst those people who invested in LCF. Indeed, as a result of the engagement my team and I have had with LCF bondholders during the course of my investigation,2 I am acutely aware of the personal and financial impact of LCF’s collapse.

I enclose with this letter my recent correspondence with the FCA which sets out the reasons for the delay in concluding the investigation. As you will see, the FCA does not object to the revised timeline for delivery of my report.

I understand that the FCA is informing the Treasury of the reasons for the delay and the revised timeline in accordance with paragraph 7(2) of the Direction. My team is also working with the FCA to agree appropriate statements regarding the revised timeline for the press, the FCA ‘s website and the dedicated website for my investigation. We anticipate that these statements will be made available tomorrow (Tuesday, 2 June 2020). I understand if you need to publish this letter and its enclosures but would be grateful if you could refrain from doing so until the statements from the FCA and my team have been released.

Please do let me know if you wish to discuss any matters set out in this letter or its enclosures.

[Signed]

Dame Elizabeth Gloster Encl.