The Financial Conduct Authority has revealed it is 'mindful' of industry feedback on the treatment of commercial property as a non-standard asset for self-invested personal pensions (SIPP) capital adequacy in the forthcoming regulation.
Speaking at the Association of Member-Directed Pension Schemes (AMPS)'s annual conference Financial Conduct Authority director of long-term savings and pensions Nick Poyntz-Wright confirmed the regulator was taking into account industry views which argued commercial property should be treated as a standard asset.
He said: "We are taking into account the feedback we received. There was a particular focus in the feedback regarding commercial property. I am not able to tell you about a final decision on that but we are mindful of the feedback we have had."
In CP12/33, then regulator the Financial Services Authority, had proposed raising the minimum capital level for providers from £5,000 to £20,000 and apply a capital surcharge for non-standard assets - including commercial property.
Such proposals form the basis of the publication of SIPP capital adequacy rules and a thematic review into the industry, which are to be delayed from their expected June 2014 release to Q3 2014.
Poyntz-Wright says both updates would be published as a "package" and he was "confident" both updates would be published next month.
He also explained the thematic review would publish examples to highlight good practice alongside findings of bad practice in terms of how SIPP operators conduct due diligence.
He also revealed the regulator was consulting on a transitional period, possibly in excess of 12-18 months for the SIPP industry to adapt to the changes enforced.
Pontyz-Wright said the regulator's stance was not to "squash the SIPP market into shape" but to focus on good outcomes for customers and the impact of accepting non-standard investments on SIPP businesses.
He also responded to criticism from AMPS committee member Geoff Buck who said the relationship between the trade body and the FCA had been "difficult" as they often received information about the industry "on the grapevine" rather than from the regulator itself.
Pontyz-Wright confirmed: "We are determined to improve engagement - it is important that we share and have that dialogue with the industry."
AMPS chairman Neil McGillivray said: "It is good that the FCA have listened to industry feedback over commercial property and that capital adequacy rules will be phased in over a period of time.
"These are two extremely positive outcomes, although we are disappointed with the delay, but we are pleased over the time taken to get it right by the regulator."
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