FCA Blames EU Rule Gaps For Woodford Fund Liquidity Crisis
Law360, London (June 25, 2019, 5:10 PM BST) -- The head of the Financial Conduct Authority defended the regulator’s handling of cash shortages at Neil Woodford’s £3.7 billion ($4.7 billion) equity fund on Tuesday, blaming loopholes in European Union rules for a liquidity crunch that went unaddressed for weeks.
Andrew Bailey, chief executive of the City watchdog, told a parliamentary hearing that managers of the flagship fund — which was frozen three weeks ago — engaged in “regulatory arbitrage” and were able to “sail close to the wind” by exploiting loopholes in fund rules known as the Undertakings for Collective Investments in Transferable Securities, or UCITS.
The Woodford Equity Income...
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