Update released 6 September 2019:
The FCA have announced on their Policy development update webpage that they intend to publish by the end of Q3 2019 the Policy Statement, that follows on from CP 18/27, on Illiquid assets and open-ended funds. AREF will notify members when the Policy Statement is actually published and will liaise with members on the implementation of any new rules and guidance in the Policy Statement.
The FCA's CP 18/27: Consultation on illiquid assets and open-ended funds consulted on proposals to reduce the potential for harm to retail investors in funds that hold illiquid assets, particularly under stressed market conditions, and help address financial stability concerns.
They were proposing a package of measures that would require:
- mandatory suspension when the independent valuer expresses uncertainty about the value of 'immovables' above a certain threshold;
- contingency plans to be established in case of a liquidity risks crystallising;
- more information to be disclosed to investors about the liquidity risks in such funds and how these risks are managed.
Other Liquidity Management issues
In March 2019 AREF responded to DWP's consultation on the Consideration of Illiquid Assets and the Development of Scale in Occupational Defined Contribution schemes
In May 2017, AREF submitted a response to FCA DP 17/1: Illiquid assets and open-ended investment funds.
April 2017 - The Independent report commisioned by AREF on real estate fund behaviour following the EU referendum.
February 2016 - Update from the FCA on liquidity management for investment firms