FCA proposes 90-day redemption notice for funds holding illiquid assets
The consultation covers 17 funds with about £7.22 billion in combined net asset value and closes Dec. 11.
At a glance
The U.K. Financial Conduct Authority proposed 90 days' notice before investors can redeem from certain funds holding illiquid assets, including real estate.
The FCA said 17 funds with roughly £7.22 billion ($9.7 billion) in combined net asset value could be affected.
Feedback runs through Dec. 11, with final rules expected in the first half of 2027.
The U.K. Financial Conduct Authority proposed 90 days' notice before investors can redeem from certain funds holding illiquid assets, including real estate. IREI reported Oct. 9, citing the Financial Times.
The FCA said 17 funds with roughly £7.22 billion ($9.7 billion) in combined net asset value could be affected. The proposal applies primarily to authorized retail investment funds with at least 50 percent of assets in inherently illiquid holdings. Because the trigger is portfolio composition rather than a sector label, an infrastructure or private-company vehicle that meets the test falls inside the same rule as a property fund.
The FCA said the measures are intended to reduce the risk of suspended redemptions and forced asset sales during periods of market stress by closing the gap between assets that can take months to sell and funds offering frequent withdrawals.
Feedback runs through Dec. 11, with final rules expected in the first half of 2027.
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