Britain begins post-Brexit asset management revamp, focus on liquidity

After a fund near-collapse in September that was utilised by pension schemes, Britain announced plans on Monday for a post-Brexit review of its regulations for the $13.2 trillion (13.2 trillion pound) asset management industry.

Regulations for the UK finance industry were created in Brussels before to the United Kingdom’s exit from the European Union. Following Brexit, UK regulators will be able to create their own rules.

Due to insufficient liquidity, the sector has struggled in recent years to handle challenges.

When investors tried to withdraw their money in the immediate aftermath of Britain’s 2016 decision to leave the EU and when the economy was shut down in March 2020 to combat COVID-19, property funds were stopped.

So-called liability-driven investment (LDI) funds, used by pension schemes to ensure long term payouts to pensioners, struggled to meet cash calls last September when UK government bond prices tumbled.

Although Britain has left the EU, many of the money market funds, LDI funds and mutual funds offered in the UK are listed in EU centres like Dublin and Luxembourg.