The FCA has published guidance following a number of investment funds announcement of temporary suspensions of trading in their property portfolios and feeder funds.

The guidance reminds fund managers of their obligations to investors, and sets out the FCA’s expectations in relation to dealing with suspensions.

The FCA reminds managers that:

1. if they dispose of underlying assets to meet redemption requests, they must ensure that such disposals do not disadvantage investors remaining in the fund or newly joining it;
2. dealing in a fund may be suspended in limited circumstances, but managers should contact the FCA before doing so;
3. if it is decided to permit redemptions at a revised, lower valuation (to reflect the presence of illiquid or hard-to-value assets in the underlying portfolio), managers should:
   1. communicate the revised price to investors who have asked to redeem clearly;
   2. explain the options available and how to cancel a redemption request; and
   3. give investors enough time to seek appropriate advice.

Copies of the FCA’s guidance and related press release are available.