Fund Liquidity - New FCA Rules Explained

Introduction

Liquidity has become an increasingly important focus for the FCA in recent years, especially following fund suspensions in the wake of the Brexit Referendum and more recently the suspension of the LF Woodford Equity Income Fund.

Illiquidity, however, is nothing new and looking back over the last couple of decades can be identified as a major issue in the suspension of the Morgan Grenfell European funds, New Star International Property Fund, and the CF Arch Cru funds.

Existing rules and guidance have proved insufficient to prevent funds running into difficulty due to lack of liquidity, therefore the FCA has published new rules for non UCITS Retail Schemes and QIS and has followed those rules up with a reminder to the managers of all authorised funds, including UCITS funds, that managing liquidity is an important aspect of running an open ended fund.

This webinar will look at the concept of liquidity and the approach of regulators to ensure that adequate liquidity is maintained.

What You Will Learn

This webinar will cover the following:

• Why liquidity matters and how it impacts on other products such as insurance and pension products
• The IOSCO report on liquidity
• AIFMD and UCITS obligations on liquidity monitoring
• FCA's consultation and rule changes on illiquid assets and authorised funds
• The FCA's 'Dear CEO' letter to authorised fund managers
• When and how to suspend and how to reopen the fund
• Lessons we can learn from notable fund suspensions relating to liquidity issues including: Morgan Grenfell, CF Arch Cru, the post referendum property fund suspensions and LF Woodford Equity Income Fund

This webinar was recorded on 3rd February 2020