Neil Woodford, founder and fund manager at Woodford Investment Management. Picture: JONATHAN ATKINS/REUTERS
Authorised corporate directors are meant to ensure fund managers stick to their investment mandates and follow the rules. They usually attract little scrutiny, but Woodford’s fall from grace has raised questions about whether they are fit for purpose. “I would expect that the Financial Conduct Authority will take a hard look at Link’s role in this affair,” Small said. “They will be asking themselves whether this is another case of firms taking an overly technical tick-box approach to regulation without proper regard for the spirit and intention of the rules.”Link, which works with almost 7,000 clients, suspended the £3.
But Financial Conduct Authority chief Andrew Bailey said while the Guernsey listings were permissible under the rules, “I don’t think it is right”, suggesting it may focus on breaches of the spirit of the law. Alan Hughes, partner at law firm Foot Anstey, said: “Something may be strictly within the rules but is it in the best interests of the investors? The fund itself and the authorised corporate director may have a broader duty to consider.”“The model is broken because of the conflict of interest,” said Matthew Priestley, head of investment management oversight at Fund Partners, itself an authorised corporate director.
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