FCA

Financial Conduct Authority (UK)

Medium Impact

FCA consults on 90-day redemption notice for NURS investing in illiquid assets

Published

Oct 7, 2026

Topics

Asset management, Authorised funds, Non-UCITS retail schemes, Liquidity management, Redemption terms, Illiquid assets, Investor disclosures

Executive Summary

The FCA has announced consultation CP26/35 on fair redemption terms for authorised funds investing in illiquid assets. The proposals would apply to authorised fund managers of non-UCITS retail schemes, or NURS, that invest in “inherently illiquid assets” such as property and infrastructure. The FCA’s central proposal is that investors would need to give at least 90 days’ notice before accessing their money, with managers able to set longer notice periods where a fund’s assets or strategy require it. The FCA says this should make investor expectations clearer, reduce the risk of liquidity-driven suspensions, and help managers avoid rushed asset sales during stress. Existing funds would have a proposed two-year compliance period and would need to give investors at least one year’s notice. This is not yet a final rule: the FCA is seeking feedback by 11 December 2026, and no effective date is stated in the supplied source.

What Changed

newMinimum redemption notice period

Some funds currently allow daily withdrawals with no notice period, despite investing in assets that may not be quickly saleable.

New

In-scope NURS would apply a minimum 90-day redemption notice period; managers could set a longer period where required by the assets or strategy.

modifiedLiquidity risk management expectation

During stress or volatility, funds with short-notice redemption terms may suspend payments because of insufficient available cash.

New

Redemption terms would be aligned more closely to the liquidity of the underlying assets.

newTransition for existing funds

No transition arrangement is stated in the supplied source for the proposed new notice-period rules.

New

Existing funds would have two years to comply and would need to give investors at least one year’s notice.

modifiedInvestor clarity at point of investment

Investors may have been offered quick-access redemption terms even where funds hold longer-term or illiquid assets.

New

Investor-facing materials and distribution processes should reflect longer-term investment characteristics and redemption constraints.

newConsultation scope

The supplied source does not identify an existing specific 90-day minimum redemption notice rule for these NURS.

New

The FCA is consulting on rules for NURS investing in assets that cannot normally be sold quickly without significant loss in value.

Business Impact

Who is affected

Directly affected

UK authorised fund managers of non-UCITS retail schemes investing in inherently illiquid assets such as property or infrastructure.

Indirectly affected

depositaries, fund administrators, transfer agents, platforms, distributors, financial advisers and investors using or supporting affected funds.

Jurisdictions

United Kingdom

Business processes

Product governance and fund design, Liquidity risk management, Redemption dealing and settlement operations, Prospectus and investor disclosure maintenance, Distributor and platform communications, Investor notification and change management, Consultation response governance

Estimated effort

Medium

Compliance risk

Medium

Affected Reports

Fund prospectus and scheme documentation for affected NURSRedemption dealing procedures and investor instruction workflowsLiquidity risk management framework and suspension controlsInvestor notification plan for existing fundsDistributor, platform and adviser communication packs

Field	Validation rule
Redemption notice period	Proposed minimum of 90 days for in-scope NURS; longer periods may be set where fund assets or strategy require it.
Investor notice for existing funds	Existing funds would need to give investors at least one year’s notice.
Transition period for existing funds	Existing funds would have two years to comply with the proposed rules.
Asset liquidity classification	The FCA refers to “inherently illiquid assets” as assets that cannot normally be sold quickly without significant loss in value, including property and infrastructure.
Redemption access disclosure	Funds should be clear from the start about how quickly investors can get their money back and whether the fund is right for their needs.

Recommended Actions

7 suggested next steps· derived from source analysis

1
AI generatedStep 1 of 7
Identify NURS portfolios with material exposure to inherently illiquid assets and map current redemption terms against the proposed 90-day minimum.
2
AI generatedStep 2 of 7
Assess which prospectus, key investor, platform and adviser materials would need updating to explain redemption access and suitability clearly.
3
AI generatedStep 3 of 7
Model liquidity, cash-buffer and asset-sale impacts under a 90-day or longer notice period, including potential effects on investment strategy and dealing frequency.
4
AI generatedStep 4 of 7
Review redemption processing systems, transfer-agent workflows and platform feeds for ability to capture, track and enforce notice-period dealing.
5
AI generatedStep 5 of 7
Prepare a consultation response by 11 December 2026, focusing on operational feasibility, investor outcomes, transition timing and asset-class specific considerations.
6
AI generatedStep 6 of 7
Develop a transition communications plan for existing investors, including the proposed minimum one-year investor notice period.
7
AI generatedStep 7 of 7
Monitor FCA follow-up publications for the final policy statement, final rules and any confirmed effective or application dates.

Timeline

publication

Oct 8, 2026

FCA press release announcing proposals for clearer redemption terms for long-term investment funds and referring readers to CP26/35.

consultation deadline

Dec 11, 2026

Deadline for feedback on the FCA proposals.

Sources

AI-generated analysis is based on the following primary sources. Always verify against the official publication.

Press releaseFinancial Conduct AuthorityOct 8, 2026
New rules to make long-term investment funds clearer ↗
https://www.fca.org.uk/news/press-releases/new-rules-make-long-term-investment-funds-clearer
Consultation paperFinancial Conduct AuthorityDate not specified
CP26/35: Fair redemption terms for authorised funds investing in illiquid assets ↗
https://www.fca.org.uk/publications/consultation-papers/cp26-35-fair-redemption-terms-authorised-funds-investing-illiquid-assets
Feedback statementFinancial Conduct AuthorityDate not specified
Long-Term Asset Funds (LTAFs) – Financial Services and Markets Act 2000: Feedback Statement FS23/7 ↗
https://www.fca.org.uk/publication/feedback/fs23-7.pdf

Related Evidence

Verified source support for this analysis

The evidence agent checks whether the drafted finding is supported by official publications and relevant public source material.

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