SEC Division of Trading and Markets no-action letter: Royal Bank of Scotland Group plc

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• ~MX7cX~ DIVISION OF TRADING AND MARKETS UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 June 4, 2018 Mr. Reuven Young Davis Polk &Wardwell London LLP 5 Aldermanbury Square London EC2V 7HR England Re: The Royal Bank of Scotland Group plc File No. TP 18-13 Dear Mr. Young: In your letter dated June 4, 2018 (your "New Request Letter"}, as supplemented by conversations with the staff, you request on behalf of The Royal Bank of Scotland Group plc, a public limited company organized under the laws of the United Kingdom and registered in Scotland ("RBSG"), an exemption from Rule 102 of Regulation M under the Securities Exchange Act of 1934, as amended ("Exchange Act"), in connection with a distribution of the ordinary shares of RBSG ("RBSG Shares") by way of a placement of RBSG Shares (the "Placing") to interested purchasers by United Kingdom Government Investments ("UKGI"), which manages the shareholding of the United Kingdom Treasury ("HM Treasury") in RBSG.1 On August 3, 2015, RBSG requested (the "Original Request Letter"), and the Securities and Exchange Commission ("Commission") granted, RBSG an exemption from Rule 102 of Regulation M (the "Original Relief Letter") to permit RBSG and RBSG Affiliates2 to continue to engage in certain ongoing market activities ("Market Activities")3 during a distribution of RBSG We have attached a copy of your New Request Letter. Each defined term in our response has the same meaning as defined, directly or by reference, in your attached letter, unless we note otherwise. l The RBSG Affiliates are: RBSG NWM (previously known as RBSG CIB), the RBSG Asset Manager (including on behalf of the RBSG Managed Funds), the RBSG Investment Managers, the RBSG Banking Units, and the RBSG Stock Borrowing and Lending Units, as described in the Original Request Letter and Original Relief Letter (except that RBSG Trustees and Personal Representatives and Citizens Financial Group Inc. ("Citizens") and its subsidiaries are no longer RBSG Affiliates as a result of the divestment of RBSG's stake in Citizens in October 2015). 'The Market Activities by RBSG Affiliates in the RBSG Shares and/or the American Depositary Shares each representing the right to receive two RBSG Shares ("RBSG ADSs"), which all occur outside of the United States, are: the derivatives and investor product market-making and hedging activities; the asset and investment management activities; the banking-related activities; the unsolicited brokerage activities; and the stock borrowing and lending activities, as described in the Original Request Letter and the Original Relief Letter (except that the trustee and personal representative-related activities have been terminated and the unsolicited brokerage activities are conducted by RBGS NWM only outside of the United States).

Mr. Young
June 4, 2018
Shares, by UKGI, as described in the Original Request Letter and the Original Relief Letter.4 In your New Request Letter, you seek the same exemptive relief from Rule 102 of Regulation M, as granted in the Original Relief, to permit RBSG and RBSG Affiliates to continue to engage, in the ordinary course of business and in accordance with applicable local law, in the Market Activities during the applicable restricted period in connection with the Placing. In your New Request Letter, you reiterate the facts and representations set forth in the Original Request Letter and confirm that, since the date of the Original Request Letter, there has been no material change in the matters described therein other than (i) the details of the Placing described in your New Request Letter and (ii) the divestment of RBSG's stake in Citizens in October 2015 and termination of the related market activities described in the Original Request Letter as "Trading in RBSG Shares by Trustees and Personal Representatives of Estates."5 Response:
Based on the facts and representations that you have made in your New Request Letter, but without necessarily concurring in your analysis, the Commission finds that it is necessary or appropriate in the public interest, and is consistent with the protection of investors, to grant, and hereby grants, RBSG an exemption from Rule 102 of Regulation M to permit the RBSG and RBSG Affiliates to continue to engage in the Market Activities referenced in your New Request Letter, subject to all of the conditions set forth in the Original Relief Letter.6 This exemptive relief is subject to modification or revocation at any time the Commission determines that such action is necessary or appropriate in furtherance of the purposes of the Exchange Act. This exemption is based solely on the facts presented and the representations made in your New Request Letter. Any different facts or representations may require a different response. In the event that any material change occurs with respect to any of those facts or 4 The Original Request Letter and the Commission's Original Relief Letter are available on the Commission's Website at: https://www.sec.goy/divisions/marketreg/mr-noaction/2015/royal-bank-Scotland-080315-atl.pdf. In your New Request Letter, you note that the RBSG CIB business referred to in the Original Request Letter has been renamed RBSG NWM (NatWest Markets) and the market activities described in the Original Request Letter as "RBSG Unsolicited Brokerage Activities" are now conducted by RBSG NWM only outside the United States. You also note that as of March 31, 2018, 11,993 million RBSG Shares were outstanding, held by 188,702 record holders. Approximately 70.3% of the outstanding RBSG Shares were held by HM Treasury, approximately, 99.9% were held of record by residents of the United Kingdom, and approximately 0.1%was held of record by non-residents of the United Kingdom. HM Treasury's total holding in RBSG represented a total economic interest of 70.3% at March 31,
2018. RBSG's market capitalization at March 31, 2018 was £31.0 billion (approximately $ 43.5 billion). During the
twelve-month period ended March 31, 2018, the worldwide ADTV of RBSG Shares was approximately 31.1 million shares, with a value of £80.5 million (approximately $112.9 million). 6 However, to be consistent with the representations that you have made in your New Request Letter, the first condition in the Original Relief Letter shall exclude the language, "with the exception of the unsolicited brokerage activities and the trustee and personal representative-related activities by Citizens and certain of its subsidiaries as described in your letter. "

Mr. Young
June 4, 2018 representations, transactions in the RBSG Shares and RBSG ADSs must be discontinued, pending presentation of the facts for our consideration. In addition, persons relying on this exemption are directed to the antifraud and anti-manipulation provisions of the Exchange Act, particularly Sections 9(a) and 10(b), and Rule 1 Ob-5 thereunder. Responsibility for compliance with these and any other applicable provisions of the federal securities laws must rest with the participants in the various transactions. We express no view with respect to any other questions that the proposed transactions may raise, including, but not limited to, the adequacy of disclosure concerning, and the applicability of other federal or state laws to, the proposed transactions. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority, hy~' osephine J. Tao Assistant Director Attachment 17 CFR 200.30-3(a)(6).