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FSA/PN/032/2006
03 April 2006

The Financial Service Authority (FSA) has today published its consultation paper CP06/5 detailing how it will regulate all personal pensions, particularly Self-Invested Personal Pensions (SIPPs), from April 2007.

This follows changes set out by the Treasury in a recent consultation which will bring SIPPs within the FSA's remit. Under the new regime all those who operate a SIPPs scheme will need to apply for additional permission or authorisation if not already authorised.

Actions the FSA will take to ensure consumer protection before regulation starts in April 2007 include:

• Encouraging all firms to adopt regulatory standards prior to formal regulation;
• Monitoring the way SIPPs are promoted;
• Liaising with trade bodies to encourage member firms to behave appropriately.

Additional changes by the Treasury mean that in future there will be no provisions within the pensions tax legislation restricting the types of firm that can operate a personal pension scheme. Any firm wishing to establish, operate or wind-up such a scheme may apply for authorisation and must obtain permission from the FSA before doing so.

The consultation period for CP06/5 ends on 2 July 2006 and final rules will be published by October 2006.

Notes for editors

1. Consultation Paper CP06/5 can be found on the FSA website.
2. In September 2005, the Treasury published a Consultation Paper "Proposed changes to the eligibility rules for establishing a pensions scheme" setting out proposals for expanding the range of firms that can set up and operate a personal pension scheme and amending the Regulated Activities Order (RAO) under the Financial Service Markets Act 2000 (FSMA).
3. After a three month consultation period, the Treasury announced on 23 March 2006 in its response statement "Proposed changes to the eligibility rules for establishing a pension scheme, Government response" that all personal pension schemes will come within the FSA's scope from April 2007.
4. The FSA published a guide on SIPPs for consumers on its website last year. More impartial information on wider pensions issues including the changes to the pensions tax regime from A-day (April 6 2006) can be found on our pensions website.
5. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
6. The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.