Reports say after the high-profile Neil Woodford fund suspension, the role of ACDs has been “laid bare” in the past 10 weeks.
ACDs ensure open-ended funds stick to regulatory rules and protect their investors. Many politicians and industry spokespeople have called for a reevaluation of the governance structures in the fund industry.
The FT report says the FCA has contacted “several” ACD providers informing them of a thematic review. The FCA has already opened an investigation into Woodford’s fund freeze, and its ACD, Link Fund Solutions, is also under scrutiny.
FCA chief executive Andrew Bailey revealed in a letter to the Treasury select committee in June that the FCA had held “monthly monitoring discussions” with Link in relation to a “deteriorating” liquidity position between April 2018 and December 2019. Link says it will co-operate with the regulator and will be co-operating “fully” with its investigation.”
Maitland head of institutional business development and client management says: “The FCA will want to see ACD providers are being proactive.
“[The Woodford scandal] caused the industry to look at things we thought we knew… because we have seen a real-life stress scenario.”