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Sipp regulation could prompt moves to SSAS and QROP schemes
Adam Wrench, head of product and business development at London & Colonial, said neither SSASs nor QROPS were regulated by the Financial Conduct Authority.
This meant advisers and providers could suggest transfers into these products as a way to avoid lengthy Sipp regulation.
He said: "While the FCA may feel that they are having some success in "shutting the front door" the problem is that there are two gaping back doors that still remain wide open in the form of SSAS and QROPS.
"In addition, the increased workload required in order to comply with the FCA's new disclosure requirements, not to mention those associated with Capital Adequacy, will ultimately lead to an increase in the costs associated with Sipps, which in turn will result in an uneven playing field when compared to SSASs and QROPs."
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He said he understood it would be unrealistic for the FCA to regulate these areas as well but that changes needed to be made, possibly by HM Revenue and Customs.
"While we understand that the FCA will not want to regulate SSASs, what HMRC could do is to insist that the Scheme Administrator be a regulated entity. For example, as the rules currently stand a director of a company could establish and register a SSAS as a registered pension scheme with HMRC.
"That same director could also be a scheme member as well as the scheme administrator. However, if HMRC insisted that the scheme administrator was a regulated firm, in the same way as it does for Sipps, then any disclosure and reporting requirements that the FCA put in place for Sipp providers could also be extended to SSAS Scheme Administrators.
"In terms of QROPS, the extended reporting requirements recently introduced for QROPS scheme managers could have taken into account similar disclosure requirements, as are currently in place for Sipp providers where the underlying clients are UK residents."