90-day notice proposed for illiquid investment funds
Retail investors face a 90-day notice period to redeem capital from illiquid funds under draft rules published by the Financial Conduct Authority on October 8, 2026.
Ninety days to prevent fire sales
Under consultation paper CP26/35, the Financial Conduct Authority (FCA) requires managers of non-UCITS retail schemes investing in inherently illiquid assets to enforce at least 90 days of redemption notice.
The rules target assets that cannot be sold rapidly without significant price discounts, such as commercial property and infrastructure.
Michelle Beck, director of markets at the FCA, noted: “Funds should be clear about whether they offer quick access or are built for longer-term investments like property.”
Current daily redemption options force managers to hoard cash or risk disorderly fire sales during market stress.
Managers may implement longer notice periods where strategy requires.
A two-year window to comply
Existing funds have two years to comply with the new requirements and must provide investors with at least one year of advance notice before terms shift.
The proposed framework brings the United Kingdom into line with international liquidity standards established for open-ended funds.
By curbing abrupt redemption suspensions and excessive cash buffers, the framework aims to restore market confidence in private asset vehicles.
The FCA is accepting feedback on the consultation proposals through December 11, 2026.
Overdue end to daily illusions
Promising daily exits for illiquid real estate was an accident waiting to happen.
While fund managers will bemoan reduced retail appeal, eliminating panic-driven fire sales protects broader financial stability.
Long-term investing requires structural honesty rather than the dangerous fiction of instant cash.