Neil Woodford faces regulator pressure over fees
The head of the UK's City watchdog has added to calls for the suspended Woodford Equity Income Fund to waive the management fees it bills investors.
Andrew Bailey of the Financial Conduct Authority said Mr Woodford "should consider his position" about the fees.
This came after MP Nicky Morgan said Mr Woodford was taking "a huge amount of money" - reportedly £100,000 per day.
Investors have been unable to put money in or take money out of the fund for more than a week after the suspension.
Investment funds charge investors fees to manage capital on their behalf.
FCA chief executive Mr Bailey told BBC Radio Four's Today programme that while Mr Woodford should "very seriously" consider his position about the fees, "we need him to manage these assets now more than ever".
"His job now is to get this fund back into a position where there can be orderly trading, so he has his work cut out now," Mr Bailey added.
Well-known stockpicker Neil Woodford suspended his flagship fund on 3 June after increasing numbers of investors asked for their money back.
Mr Woodford said he had taken the step to protect investors' interests.
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Mr Bailey said there was no time limit to the suspension, and that investors would get their money back "when the fund is put back into a condition when it can operate in an orderly fashion without disorderly sales".
"The worst thing, in my view, for investors would be if there had to be a disorderly fire sale of assets, which of course would destroy value for them, so in our view, suspension is what we regard as a sensible safety valve," Mr Bailey said.
The FCA itself has been under fire for not spotting warning signs over the fund.
Former City Minister Lord Myners told the BBC last week that the financial regulator "should have been awake" to problems at the investment fund.
On Tuesday MP Nicky Morgan, who chairs the Commons Treasury Committee, told the Today Programme that the FCA would be questioned about its "contact" with the fund, and whether it had opened a formal investigation, in an evidence session on 25 June.
"Our concern is the level of liquidity that the fund maintained and the FCA's oversight of this," she said.
"I think there is speculation within the industry that the FCA would have known about some of these issues before it became public. And of course there are investors at the heart of this.
"I'm sure I, like others, are getting emails from members of the public who have suddenly found they have put money in, and now they can't get it out."
Ms Morgan reiterated that Mr Woodford should suspend taking fees from the fund.
"I think it's something like £100,000 per day, potentially, in fees. I mean that is a huge amount of money," she said.
Investors are watching value of their investments drop, Ms Morgan said.
"It would be a gesture, certainly, for Mr Woodford not to have those fees," she added.
Mr Woodford stopped money going in or out of his fund after investors redeemed about £560m from the fund over four weeks.
He said the fund needed time to reduce its exposure to illiquid and unquoted shares "to zero".
Illiquid stocks can't be easily sold quickly, and investors may make a loss on them, while unquoted shares are those in private, non-listed, companies.
About 20% of the Woodfund fund is in unquoted assets, Mr Bailey said.
In the UK there is a 10% limit on the amount of assets that can be held in an unquoted form, but Mr Woodford circumvented this requirement, while staying within the rules, by moving about 11% of the assets to Guernsey.
Hargreaves Lansdown, which promoted the Woodford fund through its "Wealth 50" list of top buys, apologised on Sunday.
Mr Bailey said it would again look at whether Hargreaves Lansdown and other funds had been impartial, thorough, and prompt in their compilation of "best buy" lists.
On Tuesday Nicky Morgan sent a letter to Hargreaves Lansdown's chief executive Chris Hill demanding answers about his company's links with Woodford.
"We have asked HL about its links to the Woodford Fund, the Fund's inclusion on HL's Wealth 50 list, and the number of HL customers exposed to the Fund," she said.