TISA responds to the CP20/15 consultation on ‘liquidity mismatch in authorised open-ended property funds’
Renny Biggins, Head of Retirement at TISA, says: “We do not believe the proposals outlined in this paper are proportionate and are likely to cause more consumer and industry detriment than they seek to remove.
“The existing mechanism to manage liquidity mismatch should only occur at times of severe stress, where a suspension is implemented for an appropriate time. This provides a flexible and logical approach which means that outside of exceptional scenarios, the funds continue to operate as intended. A review of the last ten years indicates that liquidity related suspensions have not been a frequent occurrence and are typically linked to Brexit and the Coronavirus pandemic.
“The introduction of a notice period for all sales of these funds, irrespective of market conditions, will have significant consequences on all of those involved in the value chain including consumers, advisers, platforms, and property fund managers. Bringing in a potential six-month delay will cause numerous problems, and the inaccessibility issue would effectively remove a whole cohort of consumers from being able to access this asset class and benefit from the diversification benefits they provide.”