Some Investment Funds Could Require Three Months’ Notice Before Withdrawals

The Financial Conduct Authority (FCA) has proposed new rules that could require investors to give at least 90 days’ notice before withdrawing money from certain investment funds. Announced on 8 October 2026, the proposals focus on funds holding assets such as property and infrastructure, which can take considerably longer to sell than shares traded on public markets.

The proposed restriction would not apply to every investment fund or automatically affect all Stocks and Shares ISAs. Instead, it is intended to address a particular problem: some funds allow investors to request their money back quickly, even though the investments held by those funds cannot always be sold at short notice.

The FCA is consulting on the changes, so the new requirements have not yet been finalised. Nevertheless, the announcement highlights an important distinction for investors between the value of an investment and how quickly that investment can be converted into accessible money.

Why Is the FCA Proposing New Withdrawal Rules?

The FCA wants investment funds to offer withdrawal arrangements that better reflect the time needed to sell their underlying assets. This is particularly important for funds investing in commercial property, infrastructure and other assets that cannot easily be sold at short notice.

Some funds holding these investments currently allow investors to request withdrawals daily. Under normal market conditions, fund managers may be able to meet those requests using available cash or money received from other investors. Problems can arise when large numbers of investors want to withdraw simultaneously.

If a fund cannot raise sufficient cash, it may need to suspend withdrawals temporarily. Alternatively, its managers could be pressured into selling investments quickly, potentially accepting lower prices and reducing the value of assets held for investors who remain in the fund.

By introducing minimum notice periods, the FCA hopes to give fund managers more time to arrange sales and reduce the likelihood of withdrawals being suspended because insufficient cash is available. The changes are also intended to make withdrawal restrictions clearer before someone invests.

Which Investment Funds Could Be Affected?

The main proposals concern a category of authorised investment fund known as a Non-UCITS Retail Scheme (NURS). These funds can invest in a wider range of assets than some other retail investment funds, including investments that may be difficult to sell quickly.

The FCA is proposing minimum withdrawal notice periods for NURS holding at least 50% of their assets in what it describes as inherently illiquid investments. In ordinary terms, these are assets that cannot normally be sold quickly without potentially accepting a significant reduction in value.

The distinction is important because a fund investing directly in commercial buildings operates differently from one holding shares in property companies listed on a stock exchange. Although both may provide exposure to the property market, their underlying investments have different characteristics.

The consultation also addresses certain other NURS with limited redemption arrangements. This means the precise scope is wider than simply identifying funds that own commercial buildings.

Why Might Investors Have to Wait 90 Days?

The central issue is the difference between an investor selling units in a fund and the fund manager selling the investments that support those units.

For example, an investor might hold units in a fund that owns commercial buildings. Although the investor can submit a request to withdraw money, the fund cannot necessarily sell part of an office building immediately to raise the required cash. Finding a buyer, agreeing a price and completing a property transaction can take considerable time.

Under the FCA’s proposal, an affected fund would generally require investors to give at least 90 days’ notice before redeeming their investment. Fund managers could set longer notice periods where their assets or investment strategy justified them.

The amount ultimately received would depend on the fund’s valuation and redemption arrangements. An investment’s value can change during the notice period, so the amount shown in an account when a withdrawal is requested may differ from the proceeds eventually paid.

This is one example of why investment risk involves more than changes in market prices. The ability to sell an investment and access the proceeds when needed is another important consideration.

Would Stocks and Shares ISA Investors Be Affected?

Potentially, but only where the investments held inside the ISA fall within the relevant rules.

A Stocks and Shares ISA is a tax-efficient account that can hold different types of investments. The ISA itself does not determine how quickly every investment inside it can be sold. That depends on the particular funds, shares or other assets held within the account.

Someone holding an affected property or infrastructure fund through a Stocks and Shares ISA could therefore face the fund’s withdrawal notice requirements. By contrast, an investor whose ISA contains investments outside the proposal’s scope would not automatically become subject to the same restriction.

It is also important to distinguish between selling an investment and withdrawing money from an ISA. An ISA provider may permit cash withdrawals, but an investor first needs to have cash available within the account. If an underlying fund requires advance notice before it can be sold, that could delay when the proceeds become available.

Calfiny’s guide to how a Stocks & Shares ISA works explains the relationship between the ISA account and the investments held inside it. The FCA’s consultation concerns the withdrawal arrangements of particular funds, rather than a general change to ISA tax allowances or withdrawal rules.

What Would the Changes Mean for Existing Investors?

The proposals do not mean that investors in affected funds must immediately wait 90 days to withdraw their money. The FCA has published a consultation, and any new requirements would need to be finalised and introduced before they apply.

Under the proposed arrangements, existing funds would have two years to comply with the new requirements and would need to give investors at least one year’s notice of the changes.

This transition period matters because investors may have selected a fund partly on the basis of its existing withdrawal arrangements. Changing those terms could affect how suitable an investment is for someone expecting to need their money within a particular period.

For example, someone planning to use an investment towards a home deposit may place considerable importance on being able to access the proceeds at short notice. A fund requiring several months’ notice operates differently from one that permits frequent dealing, even where both are intended to provide long-term investment exposure.

This also connects with the concept of an investment time horizon: the period for which money is expected to remain invested before it may be needed. Withdrawal restrictions can become particularly relevant when the intended investment period is approaching its end.

Investors can establish their current position by checking their fund’s prospectus or other product documentation for its redemption terms, dealing frequency and any existing restrictions. Those documents describe the arrangements currently applying to the investment, rather than assumptions based on proposed future rules.

When Could the New Rules Come Into Force?

The FCA opened consultation CP26/35 on 8 October 2026 and is accepting responses until 11 December 2026. It expects to publish final rules during the first half of 2027, after considering the feedback received.

The final requirements could change following consultation, and a definitive commencement date for the proposed notice period has not yet been established.

The proposals build on earlier regulatory work concerning funds that invest in difficult-to-sell assets. In 2020, the FCA consulted on notice periods for certain property funds but did not finalise those proposals at the time. Separately, the existing Long-Term Asset Fund regime already includes a minimum 90-day redemption notice requirement. The latest consultation would address a different category of retail investment funds.

Conclusion

The FCA’s proposed 90-day withdrawal rule is aimed at certain investment funds holding substantial amounts of property, infrastructure and other assets that cannot easily be sold. It is not a blanket restriction on all investment funds or Stocks and Shares ISAs.

For investors, the important distinction is between the value of an investment and how quickly that value can be converted into accessible cash. The proposed rules seek to make that distinction clearer and reduce the risk of funds having to suspend withdrawals during periods of financial pressure.

With consultation continuing until December 2026, the final requirements remain undecided. For now, the existing withdrawal terms of an individual fund remain the relevant starting point for understanding when its investors can access their money.