BoE warned on property funds’ vulnerability

LONDON: Bank of England (BoE) financial-stability officials were warned a week before asset managers halted redemptions at UK property funds that higher levels of outflows following the Brexit vote could force firms to freeze assets.

Open-ended property funds had seen increased redemption pressures since the vote, according to records of Financial Policy Committee (FPC) meetings held on June 28 and July 1. The FPC was briefed by the Financial Conduct Authority on “the extent of outflows from these funds, and on the possibility that funds could suspend redemptions in the near term.”