Firms which apply to operate personal pension schemes will be given ‘interim permission', even if their application has not been approved when regulations come into force.
In a Statutory Instrument (SI) laid before Parliament, HM Treasury outlined the amendments to the Financial Services and Markets Act 2000 which mean people operating personal pensions will have to be authorised by the Financial Services Authority (FSA) from 6 April 2007.
Article four of the SI allows firms which have applied to the FSA for permission to establish, operate or wind-up a personal pension scheme between October 2006 and March 2007, but whose application is still pending when the regulations come into force, to continue operating as normal.
The SI, which has been published by the Treasury just as the FSA’s consultation on how it plans to regulate personal pensions, and in particular self-invested personal pensions (sipps) comes to an end, allows any types of firm to apply for full part four permission, or for a variation of the part four permission.
This means for those who are already regulated, the FSA will allow them to extend their activities to include personal pensions and sipps, without having to complete a full application.
According to Francis Moore, managing director of European Pensions Management, the FSA will start to accept applications from 1st October, 2006 but the cut-off date for applications will be the 23rd March 2007, and if financial services firms continue to establish, operate or wind-up a self-invested personal pension after this date without the necessary regulatory permissions they will be in breach of the FSMA 2000.
But he says the SI also sets out the idea of ‘interim permission’ where people who have applied before the deadline but whose application is still being assessed, can continue to operate with FSA approval, providing they make it clear it is only until a final decision on their application is made.
He welcomes the idea, pointing out as with everything to do with this issue the timetable is quite tight, as normally the application process takes around six months, so trying to get everybody authorised between October and April is quite a tall order.
Moore says: “The idea of interim permission to cover those firms which have applied for permission but have not yet had their applications completed, is a very sensible provision given the tight timeframe the industry is working to.“
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
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