Changes to the regulations were implemented last September, after a period of years of debate, discussion and tinkering.
The FCA has this morning provided Financial Planning Today with a Freedom of Information request document, following questions raised by a trade publication.
The regulator was asked how many Sipp firms did not hold the requisite capital as of 1 September and what action has the FCA taken over these firms.
The FCA response stated: “Of the 66 Sipp Operator firms who have reported at least once under the new capital regime, 4 firms have reported that they do not hold sufficient capital and we are in contact with these firms in line with our Supervisory Framework.”
The firms have not been named.
Officials also confirmed ten firms used tier two capital to meet the requirements, with two of these using more than 25%.
Earlier this year, Nigel Bennett, sales & marketing director, InvestAcc,
told Financial Planning Today magazine how he envisioned the regulator would go about enforcing the new regime.
He said: “The new regulations have without doubt increased the administration burden for Sipp Operators; some firms have taken this in their stride whilst others have chosen to pass on the costs directly to customers.
“As the new requirements bed in, we expect the FCA to closely monitor the quarterly returns made and to take appropriate action should they identify any issues or concerns, particularly any with the potential for consumer detriment. Unfortunately any regulatory action may have the effect of creating consumer detriment if Sipp operators lose their authorisation and a new provider is required.”
He said: “We suspect that some firms will currently be reporting figures below 100%, those firms will be working to get to 100% over the course of 2017. If they are unable to do so we would expect the FCA to take some form regulatory action with a possible ban on new business until the position is rectified and if not and no other proposal put forward we would expect the FCA to withdraw approval.”