After Brexit, Great Britain wants to put its rules for the eleven trillion pound asset management sector to the test. One focus is on strengthening liquidity buffers after certain funds ran into difficulties last September. "The supervisory framework contains rules for liquidity management. Many of these regulations are designed to protect consumers," the Financial Conduct Authority (FCA) said in a discussion paper on reform of the sector published on Monday.

Given the growth of the industry, liquidity management is important for the functioning of markets. Public consultations are scheduled for the paper.

Until the UK's withdrawal from the European Union, the rules for the British fund sector had been laid down in Brussels. After Brexit, UK regulators can now issue their rules independently of existing EU rules. However, FCA's financial supervisors want to maintain strong international standards given the UK's global role in asset management.

The sector had recently proven to be less stress-resistant due to insufficient liquidity buffers. In September, for example, liability-driven investment funds (LDIs), which are used in pension plans to hedge long-term payout obligations, came under massive pressure in the UK. At that time, the prices of British government bonds had plummeted very quickly within a short time. This had triggered calls for additional margins, which put funds under pressure.