By ADRIAN LOWCOCK 07/01/2009
New Star are to exploit changes to FSA rules which allow firms to suspend dealings in funds for indefinite periods. This is a significant change to the old rules where previously Fund Managers were only allowed to suspend dealing for 28 days and then would have to approach the FSA to request an extension.
The New Star International Property fund has been suspended since 25th November, whilst the New Star Heart of Africa fund was approaching its 28 day deadline, having been suspended on 11th December, it now does not need to apply for any extension and is under no pressure to reopen next week.
The reasons for the change in the FSA regulation was to ensure fund managers were not being forced to liquidate assets at prices that could be considered unreasonable. Indeed New Star intend to re-open both the International Property and Heart of Africa fund but are waiting for liquidity to return to those markets and are therefore not forced to sell assets at any price.