FCA waited a month to respond to Guernsey over Woodford

Exchange says it ‘proactively engaged with the FCA in the spirit of regulatory cooperation’

The Financial Conduct Authority was contacted several times in April regarding several of Neil Woodford’s Guernsey-listed assets that were suspended but did not answer the calls of the relevant Channel Islands authorities until a month later.

The International Stock Exchange Authority (TISEA) took the City watchdog to task on Thursday after being blindsided by a press release from the regulator, which it said has created misinterpretations in the media that there is an ongoing investigation into Woodford’s now gated fund.

Clarifying the situation Fiona Le Poidevin, CEO of the International Stock Exchange Group, said TISEA “is not aware of any investigation, nor any basis for such” and said the fund falls outside its remit.

“The LF Woodford Equity Income Fund is not listed on the International Stock Exchange (TISE) and not within TISEA’s regulatory remit, being a UK fund and regulated by the FCA,” said Le Poidevin (pictured). “TISEA only has a remit for certain securities listed on TISE where the LF Woodford Equity Income Fund is an investor. However, TISEA will of course communicate with and support the FCA further, as and if required.”

‘No initial response’ from the FCA

Le Poidevin pointed out that TISEA, which operates the Guernsey exchange, made “several attempts” to contact the FCA back in April “with no initial response” and only finally secured a call with the UK regulator on 8 May.

“TISEA proactively engaged with the FCA in the spirit of regulatory cooperation but subsequently was given no prior warning of the FCA statement or its content,” she said.

On 12 April TISEA decided to suspend three companies in the Woodford Equity Income fund, Industrial Heat, Ombu and Benevolent AI, which the equities manager had quietly listed as a means of staying within the FCA’s rules on unquoted companies.

Including Oxford Nanopore, technically the fund’s largest unquoted holding at 2.52% but able to be classified as a listed security given the likelihood of an impending IPO, and the three Guernsey stocks, the Equity Income fund’s unquoted holding would have been 18.2% based on his holdings as at 31 March 2019.

Benevolent AI and Ombu were reinstated on 23 April, while Industrial Heat resumed trading on 14 May.

Woodford’s Equity Income fund was suspended on Monday after it was unable to meet a spike in redemptions.

The FCA said in a statement on Wednesday that it has been “in discussions” with the International Stock Exchange (TISE) and Links Fund Solution, the Authorised Corporate Director for the fund, about the “circumstances around the listing of certain of the fund’s assets on that exchange”.

It did not discount the possibility of an investigation, signing off the press statement by saying: “Where the FCA believes there are circumstances suggesting serious misconduct or non-compliance with the rules it may open an investigation.”

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