The mandatory suspension for a non-UCITS retail scheme
COLL 7.2.-3R requires suspension by the end of the second business day after it starts to apply: where a standing independent valuer has expressed material uncertainty under the RICS Red Book over at least 20% of the value of scheme property, or where at least 20% of scheme property sits in other authorised funds already suspended. Dealing may continue only if, within those two days, the manager and depositary agree it should, have a reasonable basis for determining that suspension would not be in unitholders' best interests, and do not rely solely on a fair value price adjustment.
- A 14-day review of the agreement not to suspend. COLL 7.2.-1R(2) requires the manager and depositary to revisit it at least that often throughout the material uncertainty, and (6) requires the FCA to be told each result. The review of an actual suspension is the 28-day one at COLL 7.2.1R(4A).
- Eight limbs of COLL 7.2.1R, not the trigger. COLL 7.2.-2R(3) names them. COLL 7.2.-2R(2) adds a duty the discretionary route lacks: the depositary must be notified before dealing is suspended.
- Two conditions for restart. COLL 7.2.-2R(4) requires it as soon as reasonably practicable once the material uncertainty applies to less than 20% of scheme property and the depositary approves removal.
The step that precedes a discretionary suspension
COLL 7.2.1R(1) requires exceptional circumstances and the interest of all unitholders. COLL 7.2.2G removes the obvious candidate for the first limb.
A decision record moving straight from the redemption number to suspension, with no gate, deferral or pricing option considered and rejected, does not evidence the discounting. COLL 7.2.2G(1B) accepts that for funds investing in inherently illiquid assets suspension can genuinely serve unitholders. None of the guidance applies where suspension is required under COLL 7.2.-3R or COLL 7.2.-1R.
Pricing and the investor's option during a suspension
Suspension switches off the dealing obligations in COLL 6.2 but not pricing: COLL 7.2.1R(3)(b) requires compliance with as much of COLL 6.3 as is practicable, so the fund keeps striking a price it cannot deal on. Under COLL 7.2.2G(3) the manager should tell anyone asking to sell or redeem that dealing is suspended and that they may withdraw the request or have it executed at the first opportunity after it ends.
Suspension outside COLL
COLL 7.2 does not reach an unauthorised AIF. The power, its conditions and its review cycle live in the instrument constituting the fund and the offering documents, exercised within FUND 3.6.
The Woodford outcomes
The LF Woodford Equity Income Fund was suspended on 3 June 2019 and never reopened. Link Fund Solutions, its authorised fund manager, was publicly censured by Final Notice on 11 April 2024 for failing to act with due skill, care and diligence: it failed to manage the fund's liquidity so investors could access their money at short notice, and failed to oversee the delegate or sufficiently ensure liquidity concerns were acted on. No penalty was imposed. The FCA said it would have imposed £50 million, reduced to £35 million on settlement, but that this would have cut what consumers received. It required restitution of £298,403,919; a court-approved scheme paid up to £230 million.
Provisional, not final
On 5 August 2025 the FCA issued Decision Notices proposing penalties of £40,000,000 on Woodford Investment Management and £5,888,800 on Mr Woodford personally, with a prohibition. The provisional findings are that between July 2018 and June 2019 they made unreasonable and inappropriate investment decisions, disproportionately selling more liquid investments and buying less liquid ones, so that at suspension only 8% of the fund's investments could be sold within seven days. Both parties referred the notices to the Upper Tribunal; no final decision is recorded here, and the figures may change.