The Financial Conduct Authority (FCA) has launched a consultation on new rules to protect investors in open-ended funds investing in illiquid assets, which it hopes will result in fewer runs on these vehicles at times of stress.
The consultation follows the fallout from the Brexit vote in June 2016, when hordes of investors scrambled to pull their money out of the £35bn open-ended UK commercial property sector in anticipation of a market crash and drop in property prices, resulting in several big-name property funds being temporarily suspended. While the FCA said it was pleased that suspensions worked as they were intended to and prevented wider market disruption, with dealing in the affected funds resumed by the end of 2016, the regulatory body admitted improvements could be made "in the use of certain liquidit...
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