The mismatch between redemption terms and the liquidity profile of some open-ended funds "has the potential to become a systemic issue", the Bank of England (BoE) said on Thursday.
The BoE said it, along with the Financial Conduct Authority (FCA), will launch a review into this mismatch, as regulators continue to circle in the fallout from the Woodford liquidity crisis. Dealing in the LF Woodford Equity Income fund (WEIF) was suspended on 3 June after a significant redemption request from Kent County Council and following two years of sustained outflows decimated WEIF's liquidity profile. It remains suspended indefinitely. While the BoE said in its latest Financial Stability Report that the episode "was not systemic in nature", it accepted that future similar oc...
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