1 posts categorised "Investment funds"
05 February 2019 Illiquid assets and open-ended funds: What are the big issues for firms? The Brexit referendum result in June 2016 exposed some potential structural vulnerabilities in the asset management sector. It highlighted that open-ended funds invested primarily in illiquid assets can struggle to satisfy high demand for redemptions under stressed market conditions, at least without being forced to sell those underlying assets very quickly at a significant discount. While the existing liquidity management measures avoided major problems, the Financial Conduct Authority (FCA) has now consulted on proposals to mitigate the risk in case of a repeat event. While the industry supports the regulator’s focus on this, the more engaged firms have identified a series of challenging implementation issues among the proposed requirements. So which aspects of the proposals have triggered most debate across the industry so far and are likely to have the most significant impact?