FCA reveals extent of '10% rule' breaches - reports

Following FoI request

clock • 1 min read

The Financial Conduct Authority (FCA) has revealed that in addition to the infamous breaches made by Woodford Investment Management last year, seven investment funds have breached the 10% limit for illiquid assets held by open-ended funds a total of eight times since 2017.

Breaching the 10% limit, which has previously been criticised by the FCA as a "design flaw" in UCITS legislation, was notably a side effect of the liquidity governance failures that led to the collapse of Woodford Equity Income and ultimately Woodford Investment Management last year. Responding to a Freedom of Information (FOI) request submitted by the Financial Times, the FCA's figures reveal that incoming Governor of the Bank of England Andrew Bailey had understated the number of 10% rule breaches in testimony to the Treasury select committee during his time as chief executive of the r...

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