AMPS criticises FSCS ruling on SIPP defaults

AMPS, which trade association which represents most UK SIPP providers, has written to the FSCS to question its statements on three SIPP providers recently declared in default by the scheme. The AMPS Committee has challenged the FCA’s acceptance of claims against the operators based on factors which include “failing to carry out any due diligence on the underlying investment held in the SIPP.”The AMPS Committee said: “In its summary note, the FSCS cites a range of responsibilities purportedly lying with SIPP operators but for which the basis of such presumption is not stated in the note.”The AMPS Committee added: “The FSCS would seem to be premature in its presumption that a SIPP operator was responsible in law for “due diligence” on investments chosen by SIPP members, at a time likely to be material in actions resulting in claims seemingly accepted by FSCS.“The action of the FSCS might therefore be seen as potentially prejudicial both in the pending application for Judicial Review and to the interests of SIPP operators generally,” the Amps Committee said.The AMPS Committee is concerned that the FSCS risks going far beyond its function of acting as fund of last resort.On Friday the FCA announced that three SIPP operators - Brooklands Trustees Limited, Stadia Trustees Limited and Montpelier Pension Administration Services Limited - had been declared in default by the FSCS after 150 claims were received from investors. This means the FSCS is satisfied the firms do not have sufficient funds to meet claims. The FSCS says it has received approximately 150 claims against these firms. The claims relate to the way in which these firms established, operated and administered SIPPs through which consumers invested in non-standard investments such as storage pods, oil fields, diamonds and overseas property.FSCS chief executive Mark Neale said: “We are satisfied in these cases that certain claims are eligible for compensation, and expect to receive more claims of this nature during 2018/19. “We have therefore adjusted our forecast funding requirement for investment providers to take account of these failures, but will continue to monitor claims volumes and will update our forecast ahead of the final levy announcement in April.” The FSCS has been asked for comment.

AMPS criticises FSCS ruling on SIPP defaults

Related items

News from Twitter