The Financial Conduct Authority (FCA) is proposing to introduce new rules for retail funds that...
The Financial Conduct Authority (FCA) is proposing to introduce new rules for retail funds that invest in long-term, illiquid assets such as property or infrastructure, so that the redemption terms of such funds reflect the time it typically takes to sell the assets. The aim of the changes is to give the market more confidence to invest in funds that support private markets.
Currently, some funds that invest in illiquid assets allow people to withdraw money without notice. During periods of stress or volatility there is a risk that these funds may suspend payments due to lack of available cash. Some funds are also holding extra cash, leaving less invested in their intended assets.
Under the new rules, investors will have to give at least 90 days' notice to access their money. This will give fund managers time to sell assets in an orderly way and reduce the risk of liquidity-driven suspensions, making it more certain that investors will receive their money. It is proposed that fund managers will be able set a longer notice period if the fund's assets or investment strategy require it.
For investors, this means that it should be clearer from the start how quickly they can get their money back and whether the fund is right for their needs. Existing funds would have two years to comply and give investors at least one year's notice.
The FCA is asking for feedback on the proposals by 11 December 2026.