BREXIT STRESS-TEST
Property funds ill-prepared for turmoil, says UK watchdog
London — Asset managers did not plan properly or have clear procedures for valuing their property funds under stressed market conditions such as those in the aftermath of Britain’s June 2016 vote to leave the EU, the UK’s markets watchdog says. Several property funds were suspended after the vote as investors tried to pull their money out amid speculation that Brexit would hit commercial property prices. The Financial Conduct Authority examined the sector’s responses and published a report on Thursday, saying property funds should take external events into account as part of their planning for possible market squeezes. "We found that the use of suspensions, deferrals and other liquidity management tools were effective in preventing market uncertainty from escalating further," it said. Firms could be clearer in their communications, including to end-customers, following significant market events, it added. Some unit-linked or pooled asset providers "did not appear to understand fully...
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