UPDATE 4-Woodford rejects calls to waive fees for suspended fund

* Fund suspended June 3

* Moving unlisted stocks to Guernsey within rules -FCA's Bailey

* Bailey says will look at how funds construct "best buy" tables

* Lawmaker asks Hargreaves about links to Woodford (Adds Hargreaves response)

By Huw Jones and Carolyn Cohn

LONDON, June 11 (Reuters) - Neil Woodford's asset management firm said on Tuesday it won't waive fees for investors in its suspended flagship fund, rejecting calls from its regulator and lawmakers.

Woodford, among Britain's most famous fund managers, has faced fierce criticism after suspending his 3.7 billion pound ($4.70 billion) equity income fund on June 3, in a rare move for a fund designed for retail investors. The fund has not given a date for reopening.

"The company will continue to charge the fee as the fund remains actively managed and we focus on repositioning the portfolio," a spokesman for Woodford Investment Management said.

Fees for the fund range from 0.5-0.75% of the assets under management, the spokesman said.

Andrew Bailey, chief executive of Britain's Financial Conduct Authority, said earlier on Tuesday that he agreed with lawmaker calls for fees to be waived in the Woodford fund.

"He should consider his position," Bailey told BBC radio.

"From our point of view, we need him now to manage these assets more than ever. His job now is to get this fund back into a position where there can be orderly trading. He has his work cut out now," Bailey said.

The European Union's rule on funds limits so-called unlisted or illiquid holdings to 10%, dubbed the "trash ratio" by industry insiders.

"There is a way around that which he used, which is to take assets to another jurisdiction which can be deemed as eligible," Bailey said.

"Around about 20% of the Woodford Fund was in unquoted assets. A bit under 10% was held in Britain, and about 11% was moved to another jurisdiction. That was within the rules," Bailey said.

Four of the Woodford equity income fund's investments were listed in Guernsey in the last three years, allowing the fund to classify them as listed.

"That's allowable under the rules. I don't think it is right. Investors should be able to determine where their assets are held," Bailey said.

He said there is no fixed term for a suspension of a fund, which can be a useful "safety value".

Investors will get their money out when the fund has been put back in a condition where it can operate in an orderly fashion, he said.

"The worse thing in my view for investors is for there to be a disorderly fire sale of assets, which would, of course, destroy value for them," Bailey said.

IMPARTIAL

Nicky Morgan, chair of parliament's Treasury Select Committee, said on Tuesday she had written to British fund supermarket Hargreaves Lansdown, a major Woodford backer, asking a series of questions about the firm's links with the suspended Woodford fund.

Hargreaves picks out a number of funds it considers to be among the best value for its ‘Wealth 50’ list.

“We have received the letter of the Chair of the Treasury Select Committee and will reply in due course,” Chief Executive Chris Hill said in an emailed statement.

Bailey said that in general, the regulator looks at how funds construct best buy tables.

"They should be impartial, make sure it's done promptly, in the sense of up to date. We will look at these again to ensure they and others have abided by those principles."

Hargreaves' shares, which have fallen over 15% since the Woodford fund suspension, closed down 1.8%.

Woodford Patient Capital Trust, Woodford's only listed fund, bounced 7.5% in a move which traders described as "technical" after a drop of 20% over the past five trading sessions.

($1 = 0.7876 pounds)

(Additional reporting by Simon Jessop and Helen Reid; Editing by Rachel Armstrong/Louise Heavens and Emelia Sithole-Matarise)