U.K. Fund Liquidity Rule Breaches Soared in Covid Early Days
- 10% unquoted limit topped 13 times March-May as markets slid
- FCA doesn’t disclose names of 9 illiquid-security-heavy funds
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British money managers ran afoul of liquidity regulations 13 times at the height of this year’s market volatility, exposing their investors to the kinds of risks that can trap billions of pounds for months.
Nine funds, whose names were kept confidential, breached the 10% limit on holdings of unquoted securities between March and May, according to Financial Conduct Authority data obtained by Bloomberg through a public records request. Most of the breaches occurred in March, when Covid-19 spread to Western economies and the value of investors’ more easily tradeable securities plunged.