Could abolishing daily liquidity for open-ended funds really be a viable option?

Firms cite lack of client demand

A recent call by Aberdeen chief executive Martin Gilbert for regulators to scrap daily liquidity requirements for open-ended funds has reignited the debate about whether there is enough investor support for such a move, as well as the ability of platforms to accommodate the change.

The Bank of England recently warned rapid growth in open-ended funds and their investment in 'illiquid' assets has impaired market liquidity, while Aberdeen itself has already been forced to set aside $500m in credit lines to fund potential redemptions in the event of a bond market sell-off. Speaking to the The Daily Telegraph, Gilbert (pictured) said: "Regulators globally are concerned about liquidity in the bond markets. It is all to do with us giving daily liquidity to our client, when the underlying securities or bonds that we own are maybe less liquid." Gilbert said the issue has...