Andrew Bailey, the new chief of the Financial Conduct Authority (FCA), has said there are issues with the structures of open-ended property funds that need to be addressed, following the suspension of the SLI £2.7bn UK Real Estate fund yesterday.
Speaking today in his role as deputy governor for prudential regulation at a Bank of England press conference alongside governor Mark Carney, Bailey (pictured), who has been at the helm of the FCA for two days, said although he believes suspensions are "sensible" to allow a valuation process to take place in times of redemptions, it is an issue that needs to be addressed. "We have a situation where we have open-ended funds holding illiquid assets. The suspensions have been designed to be a part of their structure to allow a valuation process at a time of redemptions - this is not a panic...
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