EEA fund faces further delays as regulator steps in

The proposed restructure of the suspended EEA Life Settlements fund faces further delays following demands issued by the Guernsey Financial Services Commission.

Earlier this month EEA said it was preparing to restructure the fund, which has been suspended for two years, but the regulator has today stated that it “requires further information” including fully audited 2012 accounts for the product.

In a statement issued on the Channel Islands Stock Exchange, the EEA board said: “The Guernsey Financial Services Commission has now indicated that it requires further information, including the receipt of audited accounts of the fund for the 2012 financial year, before it will consider providing the necessary approvals to enable the restructuring to become effective.

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“The board and the fund’s investment manager will work with the Commission to provide this information as soon as possible, and will update shareholders on progress in due course.”

In August EEA was forced to write down the value of the fund by 10 per cent following a dispute with auditors Ernst & Young, which said the portfolio of second-hand life insurance contracts had been overvalued by as much as $100m.

The fund was initially suspended in November 2011 following a wave of redemption requests. These in turn were prompted by comments made by the FSA’s then head of enforcement Margaret Cole, who branded life settlements funds “toxic” and unsuitable for retail investors.