On 18 September 2019 the directors of Berkeley Burke SIPP Administration Limited ('BBSAL'), a firm authorised and regulated by the FCA, appointed Adrian Allen and Diana Frangou of RSM Restructuring Advisory LLP as Joint Administrators ('administrators').
On 2 October 2019 the administrators decided to discontinue BBSAL’s appeal of the High Court’s judgment about the firm’s judicial review of a Financial Ombudsman Service final decision (R (Berkeley Burke SIPP Administration Limited) vs Financial Ombudsman Service Limited). Read the High Court’s judgement.
In light of the administrators’ decision, we remind firms of our ‘Dear CEO’ letter published in October 2018. As we set out, this case dealt with Self Invested Pension Plan (SIPP) operators’ due diligence obligations when accepting customers’ investments, and referenced the Principles for Businesses and / or other rules set out in our Handbook.
We reiterate that if the outcome of this case calls into question a SIPP operator’s ability to meet financial commitments as they fall due, they should contact the FCA immediately. We also remind firms of their obligations to treat complainants fairly and handle complaints according to the rules set out in the Dispute Resolution Handbook.
Where a firm receives an ombudsman decision, it should, in accordance with Principle 6, consider whether it ought to act with regard to the position of customers who may have suffered detriment from, or been potentially disadvantaged by, such problems but who have not complained and, if so, take appropriate and proportionate measures to ensure that those customers are given appropriate redress or a proper opportunity to obtain it (see DISP 1.3.6G).
If a firm pursues a sale of part or all of its business or assets, it should pay due regard to its implications for customers who may have compensation claims. We expect all directors, as well as complying with the relevant provisions of the FCA Handbook, to comply with their statutory and non-statutory duties. These include, where a firm is at risk of insolvency, their duties to creditors, such as customers to whom compensation is or may be due.
In assessing any future regulatory applications, including applications for individuals to hold (or resume holding) FCA-approved roles, we will take into account how those individuals have acted in the context of the considerations outlined in our letter.
We will continue our work with firms and stakeholders across the sector. Firms can speak to their usual FCA contacts, or get in touch with us via [email protected].
If you are a customer of BBSAL, please refer to our website statement from 18 September 2019. If you are customer of another SIPP operator and believe the outcome of the case is relevant to your circumstances, you should contact your SIPP operator or, if it is no longer trading, the Financial Services Compensation Scheme (www.fscs.org.uk).