FCA Proposes 90-Day Notice Period for Redemptions From Illiquid Funds

The Financial Conduct Authority has proposed clearer redemption terms for authorised funds investing in assets that may be difficult to sell quickly, including property and infrastructure. Under the proposal, investors in affected funds would generally need to give at least 90 days’ notice before withdrawing their money.

The FCA said some funds currently permit daily withdrawals without notice despite holding assets that cannot reliably be sold at speed without a significant loss in value. In stressed markets, that mismatch can leave a fund short of cash, trigger a suspension of payments, or force asset sales at lower prices. The regulator says the notice period would give managers more time to sell assets in an orderly way.

The consultation applies to authorised fund managers of non-UCITS retail schemes. Existing funds would have two years to comply and investors would receive at least one year’s notice. The FCA is seeking feedback by 11 December 2026.

Why it matters

This is a liquidity-risk change, not a rule for day-trading accounts. But it matters to traders and investors holding property, infrastructure or private-market funds through a broker or investment platform: access to capital may depend on the fund’s redemption terms rather than a same-day dealing label.

The proposed change also aims to reduce the chance that an investor remaining in a fund bears the cost of another investor’s rushed exit. Before buying an illiquid-fund product, compare the dealing frequency, notice period, valuation process and suspension provisions.

What to watch next

Watch the consultation response and final rules after the 11 December deadline. Platform disclosures and product pages may need to make redemption timing more prominent if the proposal is adopted.