The Treasury confirmed all those who operate a SIPPs scheme will have to apply for additional permission, or authorisation if not already authorised. As a result the FSA has promised to adopt a stance to ensure consumer protection is at its peak before regulation starts in April 2007. To do this the regulator will encourage firms to adopt regulatory standards prior to formal regulation in addition to liaising with trade bodies to encourage member firms to behave appropriately, It has also stated it will monitor the way SIPPs are promoted.
The paper said: “This consultation paper sets out our proposals for an appropriate regulatory regime, based on an analysis of the market failures and cost benefit analysis. The FSA will be looking for financial firms to improve their standards before the April 2007 deadline.”
With firms pressing ahead for the SIPPS deadline 12 months away, the Chancellor provided greater news for investors looking to invest in properties as part of their SIPPS. As part of Her Majesty’s Revenue & Customs (HMRC) Guidance Notes, the Chancellor confirmed SIPPS could be invested directly in hotels, residential homes, hospices and prisons as well as dedicated student halls of residence. However the paper indicated that personal use of the residential property was not allowed.
An industry source, who wished to remain anonymous, said the mortgage market had been left by the wayside with regards to SIPPs. He argued: “The paper highlighted the very small range of specific types of properties that SIPPs allow. It has passed the mortgage market by after the Chancellor’s u-turn.
He added: “I don’t think this will have much of an impact for intermediaries in the residential market.”
