FCA: fund managers must act in best interests of investors

"It is the duty of the fund manager to ensure that assets are valued fairly and accurately and to ensure that any subscriptions or redemptions of units take place at a fair price."

The regulator said that following the result of the EU referendum it is "aware that some asset managers are experiencing higher than normal levels of redemption requests from investors".

However it reminded fund managers that they "have a duty to act in the best interests of all investors... therefore they must consider how to ensure the on-going fair treatment of all investors in their funds in the context of the current market conditions".

Last week Standard Life and Aviva suspended trading in their property funds following a "rapid increase in redemption requests" as a result of the Brexit vote.

In a statement, the FCA said: "It is the duty of the fund manager to ensure that assets are valued fairly and accurately and to ensure that any subscriptions or redemptions of units take place at a fair price. Failure to do so may lead to some investors gaining at the expense of other investors in the same fund.

"If a fund has to dispose of underlying assets in order to meet an unusually high volume of redemption requests, the manager must ensure these disposals are carried out in a way that does not disadvantage investors who remain in the fund or are newly investing in it.

"In exceptional circumstances, fund managers should consider whether it would be in investors’ best interests to suspend dealing in a fund or range of funds. We request that managers of authorised funds contact us in advance of any proposed suspension."