Liquidity Mismatch – FCA & BoE put forward suggested possible liquidity framework

Liquidity Mismatch – FCA & BoE put forward suggested possible liquidity framework

Regulatory Insights, Risk Monitoring

In 2019, the Bank of England (BoE) and Financial Conduct Authority (FCA) launched a joint review into vulnerabilities associated with the liquidity mismatch. The review built on the FPC’s 2015 assessment; the FCA’s 2019 Policy Statement on funds investing in inherently illiquid assets; and the work by the FSB and the International Organization of Securities Commissions (IOSCO).

Liquidity Mismatch

The Liquidity Mismatch

Regulatory Insights, Risk Monitoring

This month marked one year since the collapse of Neil Woodford’s LF Woodford Equity Income fund. The Woodford fund was suspended in June, after it became overwhelmed by redemption requests from investors. One year on and investors are still awaiting their final pay-out. One year on and questions concerning the liquidity mismatches in open-ended funds still remain.