The UK Financial Conduct Authority (FCA) today provided a short update on its proposed enforcement action against Link Fund Solutions Ltd (LFS).

The regulator confirms that it is in advanced confidential discussions with Link Group and LFS to determine whether the FCA’s proposed enforcement action against LFS can be resolved by agreement.

The FCA is focused on ensuring that consumers affected by the suspension of the Woodford Equity Income Fund (WEIF) obtain redress.

To assist a potential resolution, the FCA has provided time for Link Group to realise assets, including Link Group held assets, to meet the FCA’s concerns.

LFS is a subsidiary of Link Group. LFS managed the LF Woodford Equity Income Fund (WEIF). The FCA has been investigating the circumstances leading to the suspension of the WEIF.

The FCA has issued LFS with a draft Warning Notice following its investigation.

Issuing a draft Warning Notice is a normal step in the FCA’s enforcement process and provides a recipient with an opportunity to resolve the case by agreement. Accordingly, the draft Warning Notice is not a final decision. Link will now have 14 days to respond to the Notice.

Unless it chooses to resolve the case by agreement within that period, LFS will have an opportunity to challenge the FCA’s findings and the enforcement action proposed in the draft Warning Notice at the Regulatory Decisions Committee, the FCA’s independent decision maker in contested disciplinary cases, and through the Upper Tribunal.

The draft Warning Notice includes a proposed penalty of £50 million, before any discounts for prompt settlement. In addition, the notice sets out the basis for redress payment LFS could be required to pay of up to £306 million.