FCA Proposes 90-Day Minimum Notice Period for Illiquid Asset Funds

The FCA has opened a consultation on new redemption rules for authorised funds holding hard-to-sell assets like property and infrastructure. The proposal sets a 90-day minimum notice period for investor withdrawals, intended to prevent the liquidity mismatches that have previously forced fund suspensions. Compliance and product teams at authorised fund managers should review the consultation and consider how a mandatory notice floor would affect existing NURS structures.

• The FCA is consulting on CP26/35, proposing fair redemption terms for authorised funds investing in illiquid assets.
• Funds investing in inherently illiquid assets such as property and infrastructure would need to give investors 90 days' notice before redemption.
• Existing funds would have 2 years to comply and must give investors at least 1 year's notice of the change.
• The consultation applies to authorised fund managers of non-UCITS retail schemes (NURS).
• The FCA is asking for feedback on the proposals by 11 December 2026.