Funds face scrutiny on 'correlated investments' in BoE crackdown

FCA to conduct further research

Natalie Kenway
clock • 3 min read

UCITS funds are off the hook in the Bank of England's latest review of the impact of redemptions on existing investors, but face further investigation on correlated investment behaviour.

Reporting on its latest investigation of financial stability, the Bank's Financial Policy Committee (FPC) has found remaining investors in UCITS funds which are seeing significant outflows are "not disadvantaged" when redemptions occur. However, UCITS funds are facing further scrutiny on the potential impact of "correlated investment behaviour", as the regulators look at further measures groups could employ to limit stress for existing investors. The statement said: "These funds have grown in importance since the financial crisis, one part of a broader shift of financial intermediatio...

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