FCA opens investigation into Woodford Investment Fund

The British financial markets regulator has opened a formal investigation into the events that led up to the suspension of Neil Woodford’s equity income fund earlier this month.

Financial Conduct Authority (FCA) Source: Bloomberg

The UK Financial Conduct Authority (FCA) has opened an official investigation into the evnts surrounding the suspension of the LF Woodford Equity Income Fund (WEIF) that occurred earlier this month.

‘We have opened an investigation but cannot comment any further,’ FCA CEO Andrew Bailey said in an open letter to senior British lawmaker Nicky Morgan.

FCA questions Woodford’s investment in illiquid firms

Woodford Investment’s WEIF fund was suspended on June 3 after a spike in redemption requests as investors looked to get their money back.

The FCA has said that it plans to investigate why Woodford invested in illiquid companies on an exchange based in Guernsey, with the fund having a 10% cap on investing in illiquid assets.

In the open letter, Bailey said that the FCA has reached out to Link Fund Solutions, which is the authorised fund manager of the WEIF, in relation to ‘liquidity risks’ from the fund.

‘In February and March 2018, the FCA engaged with Link in connection with two breaches of the 10% limit on the maximum proportion of unlisted securities held within WEIF,’ Bailey said.

‘Following our engagement, these breaches were each notified to us as resolved within a timeframe we had agreed with Link,’ he added.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

See an opportunity to trade?

Go long or short on more than 16,000 markets with IG.

Spread bet and trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.