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The Actuary The magazine of the Institute & Faculty of Actuaries

SIPPs – a regulatory vacuum?

Giving evidence to the Treasury select committee last month, Financial Services Authority (FSA) chairman Callum McCarthy expressed concern that there would be a gap between A-day next year and the date when the FSA could substantively regulate investments within self-invested personal pension schemes (SIPPs). Chief executive John Tiner explained that since most providers and advisers are regulated, the FSA would seek to rely on its general ‘treating customers fairly’ powers and standards until such time – probably a year after A-day – when it could regulate the product.

Meanwhile Standard Life has called for product providers to treat SIPPs as fully-regulated products and adopt a voluntary code of self-regulation. The Edinburgh-based financial services group said only parts of SIPPs are currently regulated and that the Treasury’s consultation on regulating the product could take up to 18 months to produce results. ‘Authorised advisers recommending regulated investment classes are ensuring a good degree of regulation for SIPPs but some investment classes, such as cash and commercial property, are not yet regulated investments’, said a spokesman for Standard Life, adding the changes A-Day would bring to SIPPs investments next April made the issue more pressing.