Before the twelfth day of Christmas the FSA slipped an additional present under the tree!
With plenty of other distractions during the current economic crisis, it may have slipped under some firms’ radars, but the recent changes to the FSA rulebook could mean some significant changes for trustees of Self-Invested Personal Pensions. Under the old version of the Client Assets Sourcebook rules, trustees were able to benefit from a carve-out from some of the client money regulations. This meant that only certain clauses were applicable to trustees – which included SIPP trustees, although not all trustees chose to use the exemptions. In the area of client money reconciliation, trustees still had to perform regular reconciliations to bank statements but crucially they were excluded from the requirement for regular (usually daily) internal reconciliation between client entitlements and the firm’s records of client money balances. Under the new rules, trustees are still exempted from certain requirements; however the scope of these has now changed, bringing trustees into line with other market participants by requiring the regular internal client money reconciliations and hence funding adjustments to be performed. The insurance company provisions still apply, of course, however many SIPPs extend beyond purely insurance business and would therefore be included in these requirements.