The Financial Conduct Authority (FCA) has come under scrutiny from the Treasury Select Committee (TSC) over the suspension of Neil Woodford’s LF Woodford Equity Income Fund.

TSC chair Nicky Morgan wrote to the FCA yesterday regarding last week’s suspension, citing that the act had raised “significant concerns about its impact on investors, and the wider regulation and supervision of funds”.

Currently, investors are unable to trade or withdraw money from the fund after it was frozen last week following a spike in redemptions. According to Morgan, the regulator has a duty to “set out the details of its supervisory contact with the Woodford Fund” and inform investors on whether it will investigate the events that led to the suspension of the fund, while also detailing how long such a suspension should last.

Assets in the fund have fallen from a £10.2bn peak two years ago, dropping to less than £4bn, Morningstar data revealed.

“Questions have been raised about the FCA’s alertness to the problem. The Committee will use Mr Bailey’s response, and the FCA’s appearance before us later this month, to try to get to the bottom of this,” Morgan added.

The committee is set to quiz the regulator over the Woodford Equity Income Fund at an evidence session taking place on 25 June 2019, though Morgan has asked FCA chief executive Andrew Bailey to answer a series of questions prior to this, including a timeline of the FCA’s supervisory contact with the fund.

In the letter, Morgan said: “I would also welcome an overview of the current regulatory framework for funds, any ongoing FCA work in this area, and your thoughts on where further regulatory change may be welcome.”

Hargreaves Lansdown chief executive Chris Hill also apologised to clients who had been impacted by the suspension, as the firm had previously heavily promoted the Woodford Equity Income Fund since its launch in 2014.

Hill expressed that he shared clients “disappointment and frustration” to the BBC, stating: “I would like to apologise personally to all clients who have been impacted by the recent problems with the Woodford Equity Income Fund.

“We all share their disappointment and frustration. Our priority right now is to support our clients and keep them informed."

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