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FCA to open industry review on ACDs

The FCA has told several authorised corporate director companies to prepare for an industry probe, according to reports from the Financial Times.

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.”

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