The new rules mean that investors will have to give 90 days' notice to access their funds but will be more certain that they will receive their money.
For investors, this means the fund should be clearer from the start about how quickly they can get their money back and whether the fund is right for their needs.
Currently some of these funds allow people to take money out daily with no notice period. During periods of stress or volatility there is a risk that some funds may suspend all payments due to lack of available cash. Some are also holding extra cash, leaving less invested in their intended assets.
Rushed sales can lower prices, harm investors who stay invested and put pressure on markets.
The new notice period would give managers time to sell assets in an orderly way and make liquidity-driven suspensions less likely.
Existing funds would have 2 years to comply and give investors at least 1 year’s notice. The proposals bring the UK into line with new international liquidity standards for open ended funds.
Michelle Beck, director, markets, at the FCA, said: “Funds should be clear about whether they offer quick access or are built for longer-term investments like property. Our rules will help firms make that clearer and give the market more confidence to invest.”
The FCA is asking for feedback on the proposals by 11 December 2026.
The consultation covers authorised fund managers of non-UCITS retail schemes, known as NURS.
The FCA uses the term “inherently illiquid assets” for assets that cannot normally be sold quickly without a significant loss in value. These can include property and infrastructure investments.
Fund managers could set a notice period longer than the minimum where the fund’s assets or investment strategy require it.
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