SIPPs are a popular investment format among Britons, and many keep their SIPPs intact when they move abroad, particularly if they intend to return to the UK one day.
The FSA’s action has also revived talk among pension scheme administrators and advisers about the appropriateness of certain types of investments for pension schemes.
The FSA’s request came in the form of an email last Friday "asking us to confirm whether any of our SIPP members had invested in Harlequin Properties", according to one UK-based pensions administrator. A spokeswoman for the firm added that her company did "not have any members with these investments".
The FSA’s correspondence is understood to instruct any SIPP operators who have clients in Harlequin to provider the authority with details of these investments within five working days.
The FSA’s letter to SIPP scheme administrators comes less than two months after it issued an alert which referred specifically to an "increasing number of SIPP schemes whose underlying investment is in an overseas property purchased through Harlequin Property, a UK-based overseas property sales agent that is not regulated by the FSA".
Since news of the FSA’s letter to SIPP scheme operators broke on Friday, media organisations have followed up with stories alleging such problems as an inability to issue payments due to investors, as well as alleged pending actions by regulators.
Among the publications covering the Harlequin story has been the Mail on Sunday, which last week reported that the UK’s Serious Fraud Office had been "asked to investigate the company amid fears that it had mis-sold investments".
David Ames, who heads up Harlequin, could not immediately be reached for comment this afternoon. However, a company spokesman released a statement which dealt withthe FSA request for information from SIPP providers, the reported interest in Harlequin by the SFO, and the FSA’s alert on the company in January.
The FSA request for information "is merely a fact finding exercise by the FSA to determine the level of investment in Harlequin, which is a typical approach taken by the FSA across many products and is no reflection on Harlequin," he said.
"Harlequin has not been contacted by the SFO as part of any investigation. As far as Harlequin is concerned, there is no reason why the SFO would or should be looking at the company. However, in the event that the SFO wishes to discuss these matters with Harlequin, Harlequin will be very happy to do so.
"[With respect to the] FSA Alert, the FSA uses alerts and warnings in very different ways. Warnings are occasionally issued to consumers where there is a concern about a particular investment. That is not the case here, and the FSA has stated nothing that should be a cause for such concern among consumers or IFAs. The alert merely reminds IFAs of their duty to undertake due diligence and advise clients accordingly, based upon the amount of SIPP investment in Harlequin properties to date."
Luxury 5-star resorts
Based in Basildon, Essex, Harlequin was launched with the idea of enabling investors to buy a stake in what it calls "luxury 5-star resorts in some of the best locations in the Caribbean". According to its website, tennis champion Pat Cash’s Tennis Academy had been signed to a deal with the company’s affiliate, Harlequin Hotels & Resorts.
