FCA outlines findings on Link Fund Solutions
Link Fund Solutions (LFS) failed to act with due skill, care and diligence in managing the Woodford Equity Income Fund (WEIF)。
Link Fund Solutions (LFS) failed to demonstrate the requisite skill, care, and diligence in managing the Woodford Equity Income Fund (WEIF), according to the findings of an investigation by the UK Financial Conduct Authority (FCA).
The FCA found that during the period of the fund's suspension from July 31, 2018, to June 3, 2019, LFS failed to manage the fund's liquidity effectively (or how easily fund assets could be turned into cash) to enable investors to withdraw their funds at any time.
LFS also failed to adequately oversee Woodford Investment Management (WIM) or ensure that concerns about liquidity issues were properly addressed. Additionally, the FCA issued warning notices to Neil Woodford and WIM, proposing action against them in relation to their management of WEIF.
The FCA has issued a warning notice statement regarding its proposed action against Mr. Woodford and WIM. This includes allegations by the FCA that Mr. Woodford's responsibility for managing liquidity risk was deficient and too narrow. The statement also alleges that he and WIM failed to ensure that WEIF's liquidity risk framework was appropriate, did not adequately address the ongoing deterioration of the fund's liquidity, and failed to maintain a reasonable level of liquidity for WEIF.
The warning notices issued to Mr. Woodford and WIM are not the FCA's final decisions, and both parties have the right to make representations to the Regulatory Decisions Committee. If the FCA makes a final decision, it intends to publish its findings at the appropriate time, but currently, aside from the warning notice statement, no further details, including any proposed sanctions, can be provided.
LFS's final notice confirms deficiencies that led to the FCA investigation and subsequent agreement by LFS to settle enforcement action and provide compensation to affected parties. Individuals who invested in WEIF at the time of its suspension have begun to receive part of a £230 million compensation scheme, which was approved by the High Court in February.
The FCA also confirmed that no other parties related to the Woodford Equity Income Fund were under investigation.
Disclaimer: The views in this article are from the original author and do not represent the views or position of Hawk Insight. The content of the article is for reference, communication and learning only, and does not constitute investment advice. If it involves copyright issues, please contact us for deletion.
