The Financial Conduct Authority (FCA) has said it stands ready to take action over a potential leak of market-sensitive information that appeared to raise bank share prices before the Budget.
The regulator said it would engage with the Treasury and Cabinet Office over concerns that details of changes to bank taxes emerged before Chancellor John Healey delivered his fiscal statement last week.
Concerns raised over bank share rise
The concerns follow a letter from Treasury Committee chairwoman Dame Meg Hillier, who suggested a potential leak of market-sensitive information may have led to bank shares increasing in value.
In her letter to the FCA, the Labour MP referred to a Bloomberg report containing accurate details of planned changes to bank taxes before the October 28 Budget.
The article, published on Wednesday morning, stated the planned increase in the bank corporation tax surcharge "won't return it to the previous 8% level" and would therefore be less severe than the sector had expected.
Regulator's response
Dame Meg said: "This appears to have been more than idle speculation and it had implications for relevant securities."
In a response published on Tuesday, FCA chief executive Nikhil Rathi said the Treasury and Cabinet Office would be "best placed to ascertain and determine whether and how any unlawful disclosure of inside information may have occurred".
He said the FCA "will engage with them accordingly", adding the regulator would consider any evidence to determine whether action was warranted under market abuse rules.
"We stand ready to consider the specifics of any evidence provided to us by Cabinet Office and HMT to decide what, if any, action it is appropriate for us to take under MAR," he said.
Mr Rathi said parliamentary scrutiny was a better way to hold the Government accountable for political discourse and communications.
"We may, however, choose to intervene where that discourse or poor information handling impacts markets improperly," he wrote.
