The Financial Conduct Authority has proposed a minimum 90-day notice period for investors withdrawing from funds holding hard-to-sell assets, aiming to give investors more certainty over access while reducing the risk of forced asset sales.
The rules would apply to authorised fund managers running non-UCITS retail schemes (NURS) that hold what the FCA calls "inherently illiquid assets". These include property and infrastructure investments that cannot normally be sold quickly without a significant loss in value.
Managers could set a longer notice period than 90 days where a fund's assets or strategy required it. The regulator said the rules will "help give the market more confidence to invest in funds that support private markets".
Some funds currently let investors withdraw money daily with no notice period. The FCA noted that this creates a risk that funds may suspend payments during periods of stress if there is not enough available cash. It added that rushed asset sales to meet redemptions can lower prices and harm investors who remain in the fund.
Existing funds would have two years to comply and must give investors at least one year's notice of the change. The proposals would also bring UK rules into line with new international liquidity standards for open-ended funds.
Michelle Beck, director of 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 accepting feedback on the proposals until 11 December 2026.