FCA and BoE review liquidity rules for open-ended funds

Changes follow Woodford collapse

Pedro Gonçalves
clock
Some UK property funds are offering daily redemptions are still suspended
Image:

Some UK property funds are offering daily redemptions are still suspended

Investment funds are overestimating the liquidity of their holdings to cope with a rush to the exit, the Bank of England (BoE) and the Financial Conduct Authority (FCA) warn in a survey into open ended funds.

The regulators are reviewing the way open-ended funds operate with regards to liquidity in the wake of the high-profile collapse of Neil Woodford's fund. Several property funds were forced to suspend withdrawals due to Brexit and the pandemic, with longer redemption periods now inevitable. Managers of some of these funds considered a large proportion of their holdings to be liquid in almost all market conditions, and most funds considered the majority of their holdings to have 'high valuation certainty'. However, liquidity conditions for corporate bonds, particularly in times of ma...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Funds

Bestinvest's bi-annual Spot the Dog finds over £45bn is still in underperforming portfolios

Bestinvest's Spot the Dog finds fewest underperformers in six years

Number of dog funds more than halves

clock 08 August 2022 • 4 min read
The £237m Baillie Gifford British Smaller Companies Fund was rated as not providing value.

Baillie Gifford UK equity strategies suffer low ratings in AoV

One red and four amber funds

clock 08 August 2022 • 2 min read
Royal London group chief executive Barry O'Dwyer

RLAM AUM shrinks 9% in H1 but sustainable funds remain popular

9% decline in AUM

clock 05 August 2022 • 2 min read
Trustpilot