Industry figures have urged the Financial Conduct Authority (FCA) to rethink its definition of illiquid securities post-Brexit, after a pair of high-profile liquidity crises hit the industry.
Dealing in the LF Woodford Equity Income fund was suspended on 3 June as mass outflows diminished the fund's liquidity cushion. Two weeks later, Morningstar suspended its rating on H2O Asset Management's Allegro fund, eventually downgrading from Bronze to Neutral, due to concerns over "the liquidity of certain bonds". Rules are in place via an EU UCITS directive, aiming to limit the amount of illiquid securities an open-ended fund with daily dealing can own to 10% of net asset value (NAV). Neil Birrell: Liquidity? You pay your money, you take your choice The regulation classifie...
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