Skip to content
International Adviser
  • Contact
  • Login
  • Subscribe
  • Regions
    • United Kingdom
    • Middle East
    • Europe
    • Asia
    • Africa
    • North America
    • Latin America
  • Industry
    • Tax & Regulation
    • Products
    • Life
    • Health & Protection
    • People Moves
    • Companies
    • Offshore Bonds
    • Retirement
    • Technology
    • Platforms
  • Investment
    • Equities
    • Fixed Income
    • Alternatives
    • Multi Asset
    • Property
    • Macro Views
    • Structured Products
    • Emerging Markets
    • Commodities
  • IA 100
  • Best Practice
    • Best Practice News
    • Best Practice Awards
  • Media
    • Video
    • Podcast
  • My IA
    • Events
    • IA Tax Panel
    • IA Intermediary Panel
    • About IA

ANNOUNCEMENT: Read more financial articles on our partner site, click here to read more.

SIGN IN INTERNATIONAL ADVISER

Access full content on the International Adviser site, access your saved articles, control email preferences and amend your account details

[login-with-ajax]
Not Registered?

FCA widens retail investors and pensions access to LTAFs

By Robbie Lawther, 29 Jun 23

UK regulator is seeking views on whether the FSCS protections should be available for Long Term Asset Funds

The Financial Conduct Authority (FCA) has set out rules to give retail investors and more defined contribution (DC) pension schemes access to Long Term Asset Funds (LTAF).

The LTAF is a newly created type of open-ended authorised fund, which the UK regulator introduced in 2021, designed to invest efficiently in long-term, illiquid assets, such as venture capital, private equity and private debt, real estate and infrastructure.

LTAFs are a higher risk product – that can provide greater diversification to investment portfolios in exchange for potentially higher returns but less immediate liquidity and longer redemption periods.

To help protect consumers, LTAFs will be subject to additional protections under the FCA’s high risk investment framework, including risk warnings and customer assessments.

The FCA is also seeking views on whether the protections of the Financial Services Compensation Scheme (FSCS) should be available for this product, or whether a different approach should be in place, before LTAFs get to the retail market.

‘Good alternative results’

Sarah Pritchard, executive director of markets, said: “Longer-term less liquid real assets can generate good alternative returns for investors and, crucially, help to grow the UK economy through investments, such as new infrastructure.

“Our new rules allow retail investors, and pension funds, to invest in productive finance, but they also recognise that long-term investments can be riskier. That is why people will be given clear risk warnings and customer assessments, in line with other higher risk products.”

The FCA has worked with the Bank of England, the Treasury and industry, through the Productive Finance Working Group to create an environment where investment in longer-term, less liquid assets, by investors who understand the risks, can flourish.

The UK regulator said that the “ability to invest in illiquid assets, through appropriately designed and managed investment vehicles, is important for supporting economic growth and the transition to a low carbon economy”.

Tags: FCA | Liquidity

Share this article
Follow by Email
Facebook
fb-share-icon
X (Twitter)
Post on X
LinkedIn
Share

Related Stories

  • Latest news

    BBY former executive chairman charged over ‘dishonest use’ of $1.95m client money – ASIC

    ISA - acronym from wooden blocks with letters, ISA Individual Savings Account concept (Industry Standard Architecture ), top view on grey background

    Financial planning

    Titan Wealth study highlights need for UK ISA reform

  • Latest news

    UK financial services revolution predicted after FCA reforms released today

    Three tips for navigating market volatility

    Investment

    Volatility sees almost all UK financial advisers readying strategy change – report


NEWSLETTER

Sign Up for International
Adviser Daily Newsletter

subscribe

  • View site map
  • Privacy Policy
  • Terms and Conditions
  • Contact

Published by Money Map Media – part of G&M Media Ltd Copyright (c) 2024.

International Adviser covers the global intermediary market that uses cross-border insurance, investments, banking and pension products on behalf of their high-net-worth clients. No news, articles or content may be reproduced in part or in full without express permission of International Adviser.