The Financial Conduct Authority is in advanced confidential discussions with Link Group and Link Fund Solutions to determine whether the FCA’s proposed enforcement action against the latter can be resolved by agreement.
The regulator made a short update today, following an announcement by Link Group to the Australian Securities Exchange.
The FCA said it is focused on ensuring that consumers affected by the suspension of the Woodford Equity Income Fund (WEIF) obtain redress.
To assist a potential resolution, the FCA said it has provided time for Link Group to realise assets, including Link Group held assets, to meet the FCA’s concerns.
The update followed news that the Australian-based Link Administration is looking to sell Link Fund Solutions to Dublin-based fund manager Waystone Group.
Link said it would receive no net proceeds from the sale, and warned of an upcoming A$449m (£372.6m) non-cash impairment charge in its half-yearly results due to LFS.
LFS has also been credited with the collapse of a proposed deal last year for Link to be bought by Canadian group Dye & Durham, which was planning to a £2bn takeover of the group until concerns about liabilities arose.
The FCA said: “We have previously set out that any redress figure would be based on our view of LFS’s failings in managing the liquidity of the WEIF.”
It said it knows that investors affected by the Woodford scandal will be keen to understand what impact the news may have on them, including how any proposed scheme of arrangement would work.
It added: “We will provide a further update as soon as we are able to.”
Last September the FCA issued Link with a £50m fine warning over Woodford.
Then it said any redress payments Link could be required to pay could be up to £306m.
The FCA said the potential redress figure would reflect its view of Link’s failings in managing the LF Woodford Equity Income Fund.
FCA-determined redress is based on misconduct rather than any losses caused by fluctuations in market value or price of investments.
