H2O Asset Management

Treasury written question – answered on 5th August 2019.

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Photo of Lord Myners Lord Myners Non-affiliated

To ask Her Majesty's Government, further to the Written Answers by Lord Young of Cookham on 15 July (HL16842 and HL16843), whether they will now answer the questions put.

Photo of Lord Young of Cookham Lord Young of Cookham Lord in Waiting (HM Household) (Whip), Lords Spokesperson (Cabinet Office)

Investment fund suspensions arise when demand for redemptions exceeds the liquidity in the fund. To service these redemptions, a fund may need to sell assets at a depressed market value, to the detriment of investors, while selling only the liquid assets could result in a fund breaching its investment mandate and possibly FCA rules. The Government recognises that fund suspensions can thereby act to protect the interests of investors in the fund.

The Financial Conduct Authority (FCA) is responsible for the ongoing supervision and regulation of the UK’s financial services sector, including investment funds. The FCA’s detailed rule book ensures that firms treat their customer fairly, and its robust supervision and enforcement powers mean it can, and does, take action where a firm breaches the rules. Whether or not there has been any breach of regulatory requirements relating to UK funds and any possible investigation would be a matter for the FCA.

In circumstances where an investment fund is domiciled outside of the UK, the supervision of its compliance with applicable rules, such as the UCITS Directive, is a matter for the home state regulator.

If individuals have concerns about their investments, they should speak to their advisor or platform. If individuals have purchased units in a fund directly, they should speak with the relevant firm.

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