FCA consults on minimum redemption terms for retail funds holding illiquid assets

The FCA has opened CP26/35, proposing that retail funds investing in illiquid assets such as real estate align their redemption terms with the time it actually takes to sell what they hold. It runs to 11 December 2026, with final rules expected in H1 2027. Anyone running, distributing or wrapping NURS funds in scope should read how the proposals reshape the FIIA regime.

• The consultation proposes minimum redemption terms for NURS invested mainly in inherently illiquid assets, so terms reflect the time taken to sell them.
• Scope captures NURS funds with at least 50% of scheme property in inherently illiquid assets, plus other NURS with limited redemption arrangements.
• The proposals amend the Funds Investing in Inherently Illiquid Assets (FIIA) regime and bind all Authorised Fund Managers.
• Responses are due by 11 December 2026, with final rules expected in H1 2027.
• Distributors, advisers, SIPP operators, depositaries and unit-linked life product providers referencing relevant NURS are also in scope.

Executive summary

The FCA has opened CP26/35, a consultation on changing retail investment fund rules so that a fund's redemption terms reflect the time it typically takes to sell illiquid assets. The consultation opened on 8 October 2026 and closes on 11…

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