FCA has demanded information about business activity

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The FCA has demanded Sipp providers give information about their business activity by Thursday 8th November 2018.

The demands followed the watchdog’s Dear CEO letter to Sipp operators last week to shine light on High Court claims against Sipp providers Berkeley Burke and Carey Pensions.

The letter details the expectations of Sipp providers in regard to their due diligence obligations when accepting investments.

On the same day as the letter was sent the High Court published a landmark ruling in which Berkeley Burke lost its case against the Financial Ombudsman Service which it is currently appealing.

The data request letter asks Sipp providers to detail their professional indemnity insurance cover.

It also requests details regarding any excesses, exclusions and limits applicable to the cover and any notifications Sipp providers have made to insurers.

Regarding their financial position the FCA wants to know if firms have enough capital to meet regulatory obligations now, and for the foreseeable future.

Additionally, the FCA asks if firms sought professional advice about solvency or viability of the business in the previous half-year.

The watchdog requests board minutes regarding any discussion of winding down planning and the solvency of firms.

It also inquires with providers if they have discussed with other firms a potential sale or acquisition in the last 12 months.

FCA visits

Beside the data the watchdog has inquired with some firms to plan visits to them in the near future.

Dentons director of technical services Martin Tilley says: “I can confirm I have heard the rumors the FCA has been approaching firms to visit them after it sent the [Dear CEO] letter.

“To my knowledge we have not been approached yet but it is prudent for Sipp providers to plan for the worst potential outcome of the case involving Berkeley Burke which is the ruling is upheld.

“This ruling has opened up but not answered the question of what an appropriate level of due diligence for Sipp providers is when vetting investments.

“This can only be answered by Sipp providers checking each non-standard investment and due diligence around that investment. This could take hundreds of hours.”

If you have reason to believe you were mis-sold Sipps please get in touch with Claiming 4U for an informal chat.

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