Industry commentators have warned proposals by the Financial Conduct Authority (FCA) in its consultation paper on open-ended funds holding illiquid assets could mean multi-asset funds will have to suspend trading too if 20% of their assets are invested in suspended funds.
The regulator announced on 8 October it is consulting on a raft of new rules in a bid to protect investors in open-ended funds that hold illiquid assets from the effects of a run on redemptions. These include a mandatory suspension proposal, whereby fund managers will be required to temporarily suspend dealing in a NURS fund where the standing independent valuer (SIV) has expressed uncertainty about the price of 20% of the fund's assets. The consultation follows the fallout from the Brexit vote in June 2016, when hordes of investors scrambled to pull their money out of the £35bn...
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