Published on Friday, the FCA’s quarterly consultation paper proposes tweaking the regulatory capital framework for operators of self-invested personal pensions (SIPPs), clarifying parts of the policy and reducing compliance costs for firms.
The capital adequacy framework is designed to protect consumers in the event of a SIPP operator leaving the market.
The new rules mean that firms need to calculate their assets under administration (AUA) on a quarterly basis using valuations that are up to 12 months old.
“For some firms, obtaining accurate quarterly valuations of the AUA in a timely manner can be difficult, largely due to systems and reliance on third parties,” said the FCA.
“These changes do not amend the fundamental framework of this policy but rather make focused technical changes.”
If a firm sees an increase in its AUA, then it has six months before it must apply for a higher constant in order to calculate its initial capital requirement.
Given that there is an additional surcharge for firms administering non-standard assets, the FCA also said it was planning to broaden the range of securities on the standard asset list to include all securities trading on a regulated stock market.
Head of communications at Hargreaves Lansdown, Danny Cox, said he supports the framework.
“Maintaining consumer confidence in SIPPs as a product is essential for the market, and ensuring providers have sufficient capital adequacy is a key element,” he said.
