Chief executive of the Financial Conduct Authority (FCA) Andrew Bailey has listed a number of factors that could jeopardise market stability, including the role of open-ended investment funds, following the volatility experienced in early February.
The Chicago Board Options Exchange's Volatility Index (VIX) experienced its largest ever one-day move on 5 February, reaching its highest level since 2015 amid a steep decline in equity markets. Reflecting on the volatility, Bailey asked: "Are there features of the structure of the system today, such as the larger number of open-ended investment funds, which mean that there are risks to stability which need to be tackled?" He highlighted the FCA is currently looking at the risks associated with open-ended funds, as part of a reaction to the closures and suspensions seen in UK property...
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