UK watchdog proposes 90-day redemption notice period for illiquid assets

Oct 8 (Reuters) - Britain's finance watchdog on Thursday proposed that investors holding illiquid assets such as property must give 90 days' notice to their asset managers to withdraw money, in a move designed to reduce the risk of rushed asset sales that can harm markets. 

• The Financial Conduct Authority said the new notice period would give fund managers time to sell assets in an orderly way, making liquidity-driven suspensions less likely

• Existing funds would have two years to comply and will have to give investors at least one year’s notice, the regulator said

• The new rules are intended to strengthen liquidity risk management and help funds meet redemption requests in line with their terms, while protecting remaining investors and supporting market integrity, the FCA added

• It said the proposal brings the UK in line with new international liquidity standards for open-ended funds

(Reporting by Yamini Kalia in Bengaluru; Editing by Jonathan Ananda)