On Monday, the FCA revealed that after an announcement made on February 20 by Link Group to the Australian Securities Exchange, it is providing a short update on its potential enforcement action against Link Fund Solutions Ltd (LFS).
The regulator revealed it is in advanced confidential discussions with Link Group and LFS to decide whether the FCA’s proposed enforcement action against LFS can be settled via an agreement.
The FCA is investigating the Australian firm’s UK Fund Solutions division. Link Group recently confirmed it is in exclusive negotiations for the sale of the division.
The FCA is focused on ensuring that consumers affected by the suspension of the Woodford Equity Income Fund (WEIF) obtain redress,” the FCA said in its statement.
Link Fund Solutions managed the LF Woodford Equity Income Fund until its collapse in June 2019.
The UK regulator said that to assist in a potential resolution, it has allowed Link Group time to realise assets, including Link Group-held assets, to meet the FCA’s current concerns.
The FCA adds that it has previously confirmed that any redress figure would be based on its view of LFS’s failings in managing the liquidity of the WEIF.
The regulator states:
We know that affected investors will be keen to understand what impact this may have on them, including how any proposed scheme of arrangement would work. We will provide a further update as soon as we are able to.”
Last year in a draft notice, the FCA said LFS could be required to pay up to £306 million in redress payments, as well as a proposed penalty of £50 million.
Having gained a degree in economics, Alan entered the world of financial services starting his career in London and then moving to New York for a number of years. His first post at a City bank saw him establish a reputation as an forex trader. Having recently returned from New York after eight successful years, Alan is now a prosperous trader in his own right concentrating on commodities and forex.