The UK’s financial watchdog is facing urgent calls by a senior parliamentarian to set out when it will conclude its long-running investigation into the implosion of Neil Woodford’s investment company, as anger grows over the disgraced stockpicker’s plans to launch a new asset management business.
The chair of the influential Treasury select committee, Mel Stride, said reports that Woodford was planning to launch a new fund “may understandably be of concern to investors who previously lost out” after Woodford Investment Management collapsed.
The asset manager imploded in 2019 while still holding assets worth £3.7bn on behalf of more than 300,000 investors.
Stride urged the Financial Conduct Authority to set out a clear timeframe for the probe into the collapse, pointing out that the investigation was still ongoing more than 18 months since the stockpicker’s flagship fund was suspended.
“The FCA should set out when we can expect its investigation to conclude,” said Stride.
Woodford, who was once the UK’s most celebrated investment manager, announced this month that he was returning to stock picking with the launch of a Jersey-based fund management company. But his plans have prompted a furious backlash from politicians, campaigners and savers who are trapped in the suspended fund and have sparked questions about why the FCA’s investigation has taken so long.
Earlier this week, Gina and Alan Miller, co-founders of the True and Fair Campaign, which seeks improvements in consumer protection standards, wrote in a letter to the Treasury select committee that “a conclusion to [the FCA’s] deliberations does not appear to be in sight”.
“This is nothing short of an insult to the hundreds of thousands of small investors whose lives have been turned upside down, many of which have lost their life savings,” the letter said. “The narrow scope of the investigation and its lateness makes any findings the FCA now comes up with woefully late and utterly meaningless.”
The FCA said in a statement: “We appreciate the TSC’s interest in these issues. We committed to the Committee on Tuesday to provide a further update to them by May 31.”
The regulator said earlier this week that it recognised that the time taken to investigate the implosion of Woodford Investment Management had caused “frustration” to those affected.
“The investigation is being appropriately resourced and is progressing, though there has been some impact on accessing certain documents and witnesses during the pandemic,” said Mark Steward, director of enforcement and market oversight at the FCA.
The FCA also said Woodford would need to apply for permission before carrying out any regulated activity in the UK. The “fitness of management” and the “sustainability of a firm’s business model” were considerations included in any assessment, the regulator added.
Steward also noted that the FCA was in contact with the financial regulator in Jersey where Woodford planned to set up the new investment management company.
The Jersey Financial Services Commission revealed on Wednesday that it had not yet received any application for authorisation from Woodford for a new, Jersey-based investment management company, even though these plans were “publicly announced in a press release” and publicised in a lengthy interview in the Sunday Telegraph newspaper on February 14.
The JFSC said it was “disappointed” to see the announcement of Woodford’s plans before receiving an application for authorisation as an investment management firm in Jersey.
“It would be normal practice when making such an announcement to make it clear that it is ‘subject to regulatory approval’,” it added.
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2021-02-18 16:12:00Z
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