UK Regulator Proposes 90-Day Notice for Illiquid Asset Withdrawals

The Financial Conduct Authority proposed a new regulation on Thursday requiring investors in illiquid assets, including property funds, to provide 90 days' notice before withdrawing money. The measure aims to prevent rushed asset sales that could destabilize markets and reduce the likelihood of liquidity-driven fund suspensions by allowing managers to sell assets in an orderly manner.

Under the proposal, existing funds will have two years to comply and must provide investors with at least one year's notice of the change. The regulator stated that these rules strengthen liquidity risk management and align the United Kingdom with international liquidity standards for open-ended funds.