PwC has been appointed to oversee the compensation scheme for investors in the Woodford Equity Income fund.
Link Fund Services has written to investors in the fund with an update on the progress of the settlement agreed with the Financial Conduct Authority.
In addition to announcing that PwC will advise on the proposed scheme and to act as prospective scheme supervisors, Link announced that Jamie Drummond-Smith had been appointed as independent chairman of the committee of investors.
Drummond-Smith is a chartered accountant who spent 25 years with the accounting firm Deloitte, where he was a partner in the corporate finance group.
According to the letter, Link will issue a further letter in September when it will notify investors of the formal launch of the compensation scheme and provide further updates on its key terms.
Ryan Hughes, head of investment partnerships at AJ Bell, were gradually getting closer to receiving compensation..
He said: "While the letter still does not present a firm timeline for the payment of this redress, as it is still subject to the successful sale of the business, news that details of how the scheme will operate will be provided in September at least gives investors a date to focus on.
"That will no doubt be eagerly awaited by investors who have had to wait over four years to get to this point. While the finish line may not quite be in sight, it does seem as though the sorry saga is getting close to entering the home straight."
In April the FCA completed its investigation into LFS, the fund’s authorised corporate director, with an agreement that £235mn would be paid to investors following “critical mistakes and errors” it made in managing the fund’s liquidity.
The redress payment is made up of LFS's assets plus part of the proceeds from the sale of LFS (without the Woodford liability) to Dublin-based Waystone Group. This deal is expected to complete in October.
The FCA had originally estimated LFS’s liquidity management failures to have resulted in losses of £306mn, but in a statement on April 20, the regulator said this was substantially greater than Link's remaining assets.
Today's letter also said investors who expressed an interest in joining the investor committee would also be contacted in the coming weeks.
Ultimately, the members will be appointed by the chairperson to achieve a balanced representation of the interests.
Link Group, LFS's parent company, has said it will make a voluntary contribution to the redress as it considers it has no legal responsibility for the obligations of LFS.
In its investigation, the FCA said that as authorised corporate director, LFS had responsibility for ensuring the fund operated with appropriate liquidity risk management and controls, and that all investors were treated fairly.
The FCA considers LFS made critical mistakes and errors in managing Woodford Equity Income's liquidity with the result that the fund failed to have a reasonable and appropriate liquidity profile from September 2018.
