I would like to request for information from the Board of Directors of the Transport for London Pension Scheme, under the Freedom of Information Act. I would like to ask you to send me the following information: All currency or foreign exchange transactions since August 2018 executed on behalf of the scheme through all its relationships, including custodians, asset managers employed by the scheme and through segregated mandates Corresponding trade dates, trade times, the relevant FX pair, the amount of the transaction, whether it was a buy or sell order, the value date of the transactions and the executed exchange rate The scheme's policy document for managing foreign exchange transactions and foreign exchange costs. If you don't have a policy please say so. When you're invested in a LGPS pool, please carve-out your portion of the flow The list of managers the scheme uses and the criteria for assessing and comparing managers' foreign exchange costs. If you don't have a foreign exchange cost evaluation criteria please say so. When trading is done through a custodian or a segregated mandate, the policy the scheme has for assessing foreign exchange costs

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Our ref: FOI-1941-1920

Thank you for your request received on 24 September 2019 asking for information about the Transport for London (TfL) Pension Scheme.

Your request has been considered in accordance with the requirements of the Freedom of Information Act and our Information Access Policy. I can confirm we do hold the information you requested. You asked for:

1)    All currency or foreign exchange transactions since August 2018 executed on behalf of the scheme through all its relationships, including custodians, asset managers employed by the scheme and through segregated mandates

Information covering the TfL Pension Fund investments in 2018-19 can be found in the Annual Report and Accounts section on our website: http://content.tfl.gov.uk/report-and-accounts-31-march-2019.pdf  Information for 2019-20 will be published in the Pension Fund’s next annual report, in 2020.

           

General information about the TfL pension fund can be found here http://tflpensionfund.co.uk

In accordance with section 21 of the FOI Act, we are not obliged to supply you with a copy of requested information that is already accessible to you elsewhere.

Further , we are not obliged to supply detailed financial information at transaction level as it is subject to a statutory exemption to the right of access to information under section 41 and 43(2) of the FOI Act. In this instance a section 41 exemption has been applied as disclosure of the information you have requested was provided to TfL by a Third Party (investment consultants) in confidence. Information received from investment consultants on individual investment holdings (which reflect their various strategies) represent the employment of their own intellectual property (for which we pay fees for them doing so) and is proprietary and confidential in nature intended for the use of the recipient only. The information is not in the public domain, and there was not a reasonable expectation that the withheld information would be made public by TfL. Therefore we consider that disclosure would constitute an actionable breach of confidence. Since section 41 confers an absolute exemption, it is not necessary to consider whether the public interest in maintaining the exemption outweighs the public interest in disclosing the information. Even if section 41 did not confer absolute exemption, there would be no special public interest in disclosure of this information that would justify a breach of confidence in this case.

We also consider in this instance that a section 43(2) exemption also applies as disclosure of transactions would allow competitors to get accurate data about our investment consultants’ strategies and devaluing their intellectual property by their not being able to earn an income from it if it is provided free to the general public. The use of this exemption is subject to an assessment of the public interest in relation to the disclosure of the information concerned. We recognise the need for openness and transparency by public authorities, but in this instance the section 43(2) exemption has been applied as it would be likely to prejudice the commercial interests of our investment consultants, and enable their competitors to access useful information about them which would potentially reduce the competitiveness of the trading market. This could ultimately have a bearing on the value for money of pension scheme for our staff.

2)    Corresponding trade dates, trade times, the relevant FX pair, the amount of the transaction, whether it was a buy or sell order, the value date of the transactions and the executed exchange rate

Please see answer provided above.

3)    The scheme's policy document for managing foreign exchange transactions and foreign exchange costs. If you don't have a policy please say so.

The Fund’s investment managers have discretion to make use of foreign exchange transactions to assist in the efficient running of their portfolios but almost all are transacted using an agency model. Also, as noted in the Statement of Investment Principles, available publicly on our  website http://tflpensionfund.co.uk , the Trustees consider currency risk as measured by the level of exposure to non-Sterling denominated assets and it is addressed through a currency overlay strategy. This is conducted by the Fund’s investment managers and on the advice of its investment consultant.

4)    When you're invested in a Local Government Pension Scheme (LGPS) pool, please carve-out your portion of the flow

The TfL Pension Fund has no connection with the LGPS.

5)    The list of managers the scheme uses and the criteria for assessing and comparing managers' foreign exchange costs. If you don't have a foreign exchange cost evaluation criteria please say so.

The Fund’s managers are listed in the Annual Report & Accounts (see above for website link). There is no formal criteria, but the managers’ use of foreign exchange transactions and associated costs would form part of the regular manager assessment by the trustees and their advisers.

6)    When trading is done through a custodian or a segregated mandate, the policy the scheme has for assessing foreign exchange costs

The Fund uses Agency FX Model with the exception where restricted currencies are involved in which case the Fund’s custodian is used. Foreign exchange costs are included within the regular financial and investment review conducted at Trustee meetings.

If this is not the information you are looking for, please do not hesitate to contact me.

Please see the attached information sheet for details of your right to appeal as well as information on copyright and what to do if you would like to re-use any of the information we have disclosed.

Yours sincerely,

Melissa Nichols

FOI Case Officer

General Counsel

Transport for London

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