The Guernsey Stock Exchange has disputed the claims made by the Financial Conduct Authority in relation to the suspension of the Woodford Equity Income fund.
The fund was suspended on Monday (3 June) due to the volume of redemption requests from clients unhappy with the level of performance.
The International Stock Exchange, which operates the market in Guernsey, contradicted claims made by the FCA when it said it had not been informed of Neil Woodford's decision to list some of his unquoted holdings on the island to ensure he met Uctis rules.
In its official response to the suspension of the fund, the FCA said it had not been contacted by TISE and had not known about the decision to list the shares in Guernsey.
But Fiona Le Poidevin, the chief executive of TISE, said: “The International Stock Exchange Group and its subsidiary The International Stock Exchange Authority, wish to ensure that there is no lack of clarity in this situation.
"It is important to note that The International Stock Exchange Authority made several attempts to contact the FCA back in April 2019 but with no initial response, finally securing a call with them on May 8 2019. The International Stock Exchange Authority proactively engaged with the FCA in the spirit of regulatory cooperation but subsequently was given no prior warning of the FCA statement or its content.
"The International Stock Exchange Authority only has a remit for certain securities listed on TISE where the LF Woodford Equity Income fund is an investor. However, The International Stock Exchange Authority will of course communicate with and support the FCA further, as and if required."
Woodford Equity Income held substantial holdings in unquoted companies and, as cash fled the fund, the manager was forced to sell assets to raise funds.
No UK open-ended fund can have more than 10 per cent in unquoted companies and as Mr Woodford was selling quoted holdings to meet redemptions, the proportion of unquoted holdings was rising to a level that would breach regulatory limits.
To address this, Mr Woodford listed some if his unquoted holdings on the Guernsey Stock Exchange, which counted as listed for regulatory purposes.
Nicky Morgan, chairman of the Treasury Select Committee, announced she intended to question the regulator about its role in the events leading up to the suspension of the fund in the coming weeks.