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29 May 2013

FCA Urged To Raise SIPPs Capital Threshold

The Financial Conduct Authority (FCA) should increase the proposed threshold for self-invested personal pensions (Sipp) from a minimum of £20,000, as currently planned, to £50,000, the Association of Member-Directed Pension Schemes (AMPS) said, as quoted by the Financial Times Adviser.

AMPS´ chairman Andrew Roberts stated that while the organisation supported calls for a higher minimum threshold, it believes the FCA, which recently replaced the Financial Services Authority, should also consider an interim amendment to such rules. AMPS claimed that further consultation should be organised so that a formula for specific requirements could be developed.

Roberts explained that rules do not have to be too complex, adding that a simpler route has its own advantages. Under the proposal, the formula should be changed to each provider´s specific requirements. He added that the outcome should present a set of reasonable rules that do not necessarily leave out well-managed Sipp firms.

AMPS obtained 55 out of the 57 responses to a consultation paper in November and said that there was strong support for improved consumer protection but very little backing for the regulator´s formula, which was generally believed to be not supported by evidence. The data, which was obtained through a Freedom of Information Act request, also showed that many companies suggested that capital adequacy should be related to turnover.

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