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The last six weeks of 2013 saw a wave of consultations and changes in regulations affecting the world of SIPP Operators. As a result SIPP Operators are in for an interesting 2014.
SIPP Capital Adequacy
The FCA has announced that there will be a further delay on its decision in relation to capital adequacy for SIPP Providers. It is now anticipated that any announcement will not be until July 2014.
FCA Thematic Review
In October 2013 the FCA announced its third thematic review of SIPP Operators in as many years. Initially only around 10 – 15 firms were approached to participate in this review however the FCA introduced a second round and a further 78 firms have been selected to participate. All responses had to be submitted by the 6th December and the FCA have indicated that around 20 – 30 firms will receive a visit during the first quarter of 2014.
The review has concentrated on the types of SIPP schemes that are operated including information relating to the types of assets held within such schemes and the model of the business and its future strategy.
With the regulator stating that they want to take time to fully understand the sector, final guidance as a result of the thematic review will not be published until July 2014.
Client Money & Assets (CASS) Consultation Paper
The CASS rules is a key focus for the FCA particularly in view of the high profile fines that have been levied on firms failing to meet their obligations in relation to CASS.
Whilst the consultation period has ended the new guidance is expected from the FCA during the first quarter of 2014.
Due Diligence on Investments
With the number of high profile investment failures in SIPPs during 2013, the need for SIPP Operators to have a robust due diligence procedures in place is more important than ever.
Taylor Patterson has a cautious outlook on esoteric investments, which has served us well in recent times when many providers have collapsed as a result of the esoterics they have permitted within their SIPP wrappers.
It is hoped that further guidance and clarity will be given by the regulator during 2014.
Consolidation in the Market Place
Due to the uncertainty surrounding capital adequacy, high profile investment failures and pension liberation issues there has been an increase in the number of acquisitions and further consolidation within the SIPP market.
Taylor Patterson believes there is still a market for a truly bespoke SIPP Operator and remain committed to this market place.