Investment managers must ensure that they appropriately manage liquidity risks in their funds and disclose those risks to investors, according to the U.K. Financial Conduct Authority (FCA). Working with the Bank of England to assess risks posed by open-ended investment funds investing in the fixed income sector, the FCA reviewed a number of large investment management firms to understand their liquidity management practices. The FCA has compiled its findings in an update recommending good practices for hedge fund and other investment managers to manage liquidity in their funds. The FCA expressly stated that, even though they originated in the open-ended fund context, its conclusions apply across the entire investment fund industry. This article outlines the FCA’s recommendations. For more on liquidity, see “Schulte Partner Stephanie Breslow Discusses Tools for Managing Hedge Fund Crises Caused by Liquidity Problems, Poor Performance or Regulatory Issues” (Jan. 9, 2014); and “Seward & Kissel New Hedge Fund Study Identifies Trends in Investment Strategies, Fees, Liquidity Terms, Fund Structures and Strategic Capital Arrangements” (Mar. 5, 2015). For additional recommendations from the FCA, see “FCA Urges Hedge Fund Managers to Prepare for MiFID II” (Oct. 29, 2015).