Guernsey Stock Exchange and FCA in discord over Woodford fund

The Guernsey Stock Exchange has disputed the claims made by the Financial Conduct Authority over the suspension of the Woodford Equity Income fund, with a war of words breaking out between the watchdogs.
Guernsey's stock exchange said it knows of no investigation by Britain's financial markets regulator into the bourse connected to the suspension of a fund by Neil Woodford, or a reason to start one.
The FCA indicated on Wednesday that it was concerned the movement of some or all of Woodford's stake in four companies to Guernsey might be an attempt to side-step rules capping the share of unlisted stocks in his fund at 10%.
The International Stock Exchange Authority 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"
The UK watchdog said it had not been contacted by TISE and had not known about the decision to list the shares in Guernsey.
But Fiona Le Poidevin, the chief executive of TISE, said: "It is important to note that The International Stock Exchange Authority made several attempts to contact the FCA back in April 2019 but with no initial response, finally securing a call with them on May 8 2019"
In a rebuke to the FCA, TISE said it had received no warning of the former's plan to release a statement about Guernsey on Wednesday.
"The International Stock Exchange Authority 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."
"The International Stock Exchange Authority only has a remit for certain securities listed on TISE where the LF Woodford Equity Income fund is an investor. However, The International Stock Exchange Authority will of course communicate with and support the FCA further, as and if required."
Woodford Equity Income held substantial holdings in unquoted companies and, as cash fled the fund, the manager was forced to sell assets to raise funds.
No UK open-ended fund can have more than 10% in unquoted companies and as Woodford was selling quoted holdings to meet redemptions, the proportion of unquoted holdings was rising to a level that would breach regulatory limits.
To address this, Woodford listed some if his unquoted holdings on the Guernsey Stock Exchange, which counted as listed for regulatory purposes.
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.
Woodford is also facing pressure over its decision not to waive fees on the suspended fund, a favourite among retail investors. On Thursday a senior British lawmaker, Nicky Morgan, chair of the Treasury Committee, joined calls for Woodord to act.