FCA proposes 90-day notice rule for property and infrastructure funds
The regulator wants investors in funds holding hard-to-sell assets to get 90 days' notice before they can withdraw money, to stop rushed sell-offs during periods of stress.
The Financial Conduct Authority has set out proposed rules that would force asset managers to give investors 90 days’ notice before they can withdraw money from funds holding hard-to-sell assets such as property and infrastructure.
What is changing
Under the proposals, published as consultation paper CP26/35, funds that invest in what the FCA calls “inherently illiquid assets” would have to build in a minimum 90-day notice period for withdrawals. These are assets, including property and infrastructure, that cannot normally be sold quickly without a significant loss in value.
Currently, some of these funds let investors take money out daily with no notice at all. The FCA says this mismatch between quick access and slow-to-sell assets creates risks: during periods of market stress, funds can be forced to suspend all payments because they do not have enough cash on hand, or they end up holding extra cash as a buffer, leaving less money actually invested in property or infrastructure as intended.
Who is affected
The consultation covers authorised fund managers running non-UCITS retail schemes, known as NURS, which include property funds marketed to UK retail investors. Anyone holding money in these types of funds would, under the new rules, need to plan ahead rather than expect same-day or next-day access to their cash.
Fund managers would be able to set a notice period longer than the 90-day minimum if the fund’s assets or investment strategy require it.
Existing funds would be given two years to comply with the new regime, and managers would have to give investors at least one year’s notice before the change takes effect for their particular fund.
Why the FCA is acting
The regulator points to the risk of rushed asset sales when too many investors try to withdraw money at once. Selling property or infrastructure assets quickly can push prices down, which the FCA says harms investors who remain in the fund and puts additional pressure on markets more broadly. A clearer notice period is intended to give fund managers time to sell assets in an orderly way, reducing the chance that funds have to suspend withdrawals altogether.
Michelle Beck, director, markets, at the FCA, said: “Funds should be clear about whether they offer quick access or are built for longer-term investments like property. Our rules will help firms make that clearer and give the market more confidence to invest.”
The FCA also says the changes would bring the UK in line with new international liquidity standards for open-ended funds, and are designed to give the market more confidence to invest in funds that support private markets.
What happens next
The FCA is consulting on the proposals and is asking for feedback by 11 December 2026. No final rules have yet been confirmed. Investors with money in property or infrastructure funds currently are not immediately affected, and any changes to notice periods for existing funds would only take effect after the two-year compliance window and at least one year’s advance notice from their fund manager. Full details of the consultation, CP26/35: Fair redemption terms for authorised funds investing in illiquid assets, are available from the FCA.