Following the news of commercial property values plunging by over 27% during 2008, the FSA has taken steps to safeguard commercial property funds from skittish investors withdrawing their cash.

It went unannounced last month that the financial regulator had changed the rules regarding funds being closed to withdrawals. Previously, unit trusts would be made to sell assets in order to return investor cash and could only freeze withdrawals for a maximum 28 days, now funds can be closed "indefinitely" to withdrawals, meaning that fund managers won't have to sell property at rock bottom prices.

Many funds are finding it increasingly difficult to sell buildings off fast enough in order to return investors' money.

The relaxation of rules will come as no surprise to those already familiar with the tactics of funds run by New Star, M&G and Aegon, who have been known for preventing cash withdrawals from investors in the past. Under old rules, after 28 days of blocking withdrawals, the fund manager could simply reapply to the FSA for another 28 day extension period. The new rules state that managers must continue to review a fund's monthly status.

The FSA has stated: "We concluded that unitholder interests could be adequately protected by permitting a longer period of suspension, provided the reason for the suspension was regularly reviewed."