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UK watchdog proposes 90-day redemption notice period for illiquid assets - Finance news and analysis from Global Banking & Finance Review
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UK watchdog proposes 90-day redemption notice period for illiquid assets

Published by Global Banking & Finance Review

Posted on October 8, 2026

2 min read

· Last updated: October 8, 2026

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FCA Proposes 90-Day Redemption Notice for Illiquid Asset Funds in UK

FCA's New Redemption Notice Proposal: Key Details and Implications

Overview of the Proposed Rules

Oct 8 (Reuters) - Britain's finance watchdog on Thursday proposed that investors holding illiquid assets such as property must give 90 days' notice to their asset managers to withdraw money, in a move designed to reduce the risk of rushed asset sales that can harm markets. 

Objectives of the Notice Period

• The Financial Conduct Authority said the new notice period would give fund managers time to sell assets in an orderly way, making liquidity-driven suspensions less likely

Implementation Timeline for Existing Funds

• Existing funds would have two years to comply and will have to give investors at least one year’s notice, the regulator said

Strengthening Liquidity Risk Management

Protecting Investors and Market Integrity

• The new rules are intended to strengthen liquidity risk management and help funds meet redemption requests in line with their terms, while protecting remaining investors and supporting market integrity, the FCA added

Alignment with International Standards

• It said the proposal brings the UK in line with new international liquidity standards for open-ended funds

Reporting and Editorial Credits

(Reporting by Yamini Kalia in Bengaluru; Editing by Jonathan Ananda)

Key Takeaways

  • FCA’s proposed rule mandates a minimum 90‑day redemption notice for funds exposed to illiquid assets to improve liquidity risk management and align with international standards. (fca.org.uk)
  • Existing funds would have a two‑year transition period to comply and must give investors at least one year’s notice of the change. (fca.org.uk)
  • The proposal supports orderly asset sales, reduces risk of fire‑sales and liquidity‑driven fund suspensions, and brings the UK in line with IOSCO/FSB recommendations and international norms. (fca.org.uk)

References

Frequently Asked Questions

What is the proposed 90-day redemption notice period for illiquid assets?
Investors in illiquid assets such as property must provide 90 days' notice before withdrawing money, as per the proposal by the UK's Financial Conduct Authority.
Why is the FCA suggesting a 90-day notice period?
The 90-day notice period is designed to give fund managers time to sell assets in an orderly way, reducing the risk of rushed asset sales and liquidity-driven suspensions.
Which funds will need to follow the new notice period?
All new and existing funds investing in illiquid assets like property must comply, though existing funds will have two years to fully implement the rule.
How does this proposal affect investors in existing funds?
Investors in existing funds will receive at least one year’s notice before the changes take effect, allowing them time to adjust to the new rules.
How do these rules compare to international standards?
The FCA states the proposal brings the UK in line with new international liquidity standards for open-ended funds.

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