FCA opens discussion on further 'regulatory intervention' for open-ended funds investing in illiquid assets

Follows last year's property fund suspensions

The Financial Conduct Authority (FCA) has unveiled an industry-wide discussion paper on whether further regulatory intervention may be needed to protect consumers in open-ended funds investing in illiquid assets, and ensure market stability.

It said it will draw on responses received by 8 May, together with further supervisory work, to decide whether changes need to be made to Handbook rules and guidance. The regulator said it does not intend to ban open-ended funds holding illiquid assets - including land and buildings, infrastructure and unlisted securities - or prevent retail investors from acquiring units in open-ended property funds. However, it wants to start a broader discussion on how regulation could help narrow a potential mismatch between investors' expectations of fund liquidity and the manager's ability to me...