FCA eyes 180-day notice period for property fund redemptions

Consults to address 'structural mismatch'

The Financial Conduct Authority (FCA) has proposed steps to address the liquidity mismatch in open-ended investment funds that has led to numerous fund suspensions in recent years, including the implementation of a 180-day notice period for consumers redeeming investments.

Open-ended property funds across the IA Direct Property sector are currently suspended owing to material uncertainty in valuing their assets amid the fallout from the coronavirus pandemic. However, previous waves of suspensions, notably including the one seen in the wake of the 2016 Brexit referendum, were linked to mass redemptions that managers were unable to facilitate as a result of the inherently illiquid nature of the funds' underlying assets. Home truths: 80% of open-ended property funds suspended as 'history keeps on repeating itself' Open-ended funds have been under the sc...