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

Following FoI request

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...