FCA’s 90-day fund proposal: a notice period is not a payment date

The brief

The FCA is consulting on redemption arrangements for certain UK authorised funds holding illiquid assets. Its proposals include a minimum 90-day notice period and limits on dealing frequency. These are proposals, not rules already in force; responses are due by 11 December 2026. Source: consultation CP26/35.

The practical issue is how an investor understands the journey from submitting a request to receiving money. Our take is to separate receipt, acceptance, the applicable dealing date, valuation and settlement in every acknowledgement. A single countdown can hide important conditions. Fund managers and distributors should test their proposed explanation against a request arriving just after a cut-off, and make clear what could change the expected timetable.

The full record

The consultation published on 8 October concerns non-UCITS retail schemes, including funds investing at least 50% in inherently illiquid assets. It also addresses other schemes choosing limited redemption arrangements. The FCA expects to finalise rules in the first half of 2027. Source: FCA consultation overview.

What the proposal actually says

For the relevant illiquid funds, CP26/35 proposes no more than one redemption dealing day a month and notice of at least 90 days before that day. Longer notice may be necessary for the assets concerned. Its proposed treatment of valuation and deferrals also matters: the minimum notice period should not be read as a guarantee that cash arrives on day 90. Source: CP26/35, paragraphs 3.14 and 3.46–3.52.

For existing funds, the paper proposes a two-year implementation period and at least one year’s notice to investors before limited redemption arrangements begin. These are proposed transition terms, subject to the consultation outcome. Source: CP26/35, paragraph 4.17 and Annex 3, paragraph 44.

Our analysis: acknowledge the right event

A useful acknowledgement should answer five questions: when did the request arrive; has it been accepted; which terms apply; which dealing date is relevant; and what remains uncertain about valuation or payment? Keep these answers attached to the request so a later conversation does not depend on reconstructing several messages.

Consider a hypothetical investor who sends a request immediately after a monthly cut-off. An interface that adds 90 days to the submission date could create an expectation the fund’s actual calendar cannot meet. Show the applicable date and explain the calculation in ordinary language. If the request is incomplete, say what is missing and whether the notice period has started.

Test understanding before changing the form

Ask someone unfamiliar with the process to read the acknowledgement and identify the earliest relevant dealing date, whether the payment date is fixed, and where to ask about a delay. If they cannot answer, adding another legal paragraph is unlikely to solve the communication problem.

Retain the version of the explanation sent to the investor alongside later updates. When circumstances change, identify what changed, why and what the investor can do next. This is a practical proposal for clearer records; it does not predict which rules the FCA will adopt or recommend an investment.

We checked the FCA consultation overview and relevant provisions of CP26/35. All proposed requirements and transition periods are labelled as proposals. The hypothetical cut-off example illustrates communication design and does not describe a particular fund’s contractual terms.

1. FCA consultation CP26/35, 8 October 2026
2. CP26/35 consultation paper