The British parliament’s influential Treasury Committee has called on the UK’s finance watchdog to clarify when it expects to conclude its probe into Neil Woodford’s collapsed investment fund, amid growing calls for an independent inquiry its handling over the matter.
The Financial Conduct Authority was forced to issue a statement earlier this week following news that Woodford is planning an imminent comeback by launching a Jersey-based business. His bombshell announcement comes 16 months after Woodford’s previous investment empire collapsed and before the UK financial regulator has concluded its almost two-year-long investigation into the implosion of his biggest fund.
Gina and Alan Miller, wealth managers and founder of the True and Fair Campaign, wrote to the Treasury Committee earlier this week citing “alarming regulatory and public policy implications” arising from Woodford’s planned return to fund management.
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In the absence of any findings from the FCA, the couple criticised the regulator for dragging its fee and called on lawmakers to kick start an independent investigation into the saga
Mel Stride, chair of the Treasury Committee, said in a 18 February statement that the committee had previously been “vocal in its concerns regarding the failure of the Woodford Fund and the impact on its investors”.
“As the FCA’s investigation still continues over 18 months after the fund was suspended, the reports of the new fund may understandably be of concern to investors who previously lost out,” he said, adding that the committee would consider the contents of the Millers’ letter when parliament returns next week.
A spokeswoman for the FCA said it has told the committee it will provide a further update by 31 May.
The UK regulator is facing growing criticism over its handling of the Woodford investigation, which began soon after the suspension of the former star stock picker’s flagship Equity Income fund in June 2019.
In a statement published late on 16 February, Mark Steward, director of enforcement and market oversight at the FCA, said its investigation was “appropriately resourced and is progressing”. However, he added there had been some impact on accessing certain documents and witnesses as a result of the Covid pandemic.
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The FCA also revealed that Woodford and his new business, Woodford Capital Management Partners, has not yet approached the UK regulator for authorisation.
Steward said when deciding whether to authorise a firm, it would consider factors such as “the sustainability of the firm’s business model and the fitness of its management”.
Jersey’s financial regulator has also not received an authorisation request from Woodford and said it was “disappointed” the fund manager announced plans for his new venture without first seeking the appropriate permissions.
In a statement issued on 17 February, the Jersey Financial Services Commission said it would be “normal practice” when outlining plans for a new investment business that they are “subject to regulatory approval”.
Steward said the FCA is in touch with its counterparts in Jersey and will share information regarding any authorisation requests it receives.
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