FCA announces asset retention rules for British Steel advice firms

by | Apr 25, 2022

Share this article

Facebook Open Graph

The Financial Conduct Authority (FCA) has announced today that it is using emergency powers to prevent financial advice firms, who advised members of the British Steel Pension Scheme (BSPS), from disposing of assets to avoid paying compensation.

The FCA has introduced these emergency rules, without consultation, in light of the risk that some firms will take steps to get rid of their assets if the rules were consulted on first. The measures will apply from the 27 April 2022.

The FCA previously announced proposals for a redress scheme for former BSPS members which the FCA estimates will deliver £71.2 million of redress to consumers who were wrongly advised to transfer their pension.

The temporary measures apply to firms that advised five or more BSPS members to transfer out of the pension scheme between 26 May 2016 and 29 March 2018.

 
 

The requirements mean that in-scope firms have to report to the FCA whether they can meet the potential cost of the BSPS redress. Firms will have to comply with the asset restriction rules until they confirm to the FCA that they have sufficient resources to pay their potential redress bill.

The requirements will also not apply to some firms. If the BSPS proposed redress scheme is introduced, the FCA may later consult on extending the asset retention until firms have paid all the compensation owed.

Sheldon Mills, Executive Director of Consumers and Competition at the FCA, said:

 

‘Firms who gave poor advice to British steelworkers must ensure that they retain assets and funds to pay redress under our proposed scheme. We are using these emergency powers today to prevent firms from avoiding paying any redress that is due to their customers and to help reduce the potential burden on the Financial Services Compensation Scheme.

‘We will act swiftly if the rules aren’t being followed.’

Share this article

Related articles

IFAM 126 | Taxing Times | March 2024

IFAM 126 | Taxing Times | March 2024

For many advisers and their teams, March mainly means one thing – the rush for the line as the end of the tax year comes into view. As the silly season kicks in, advisers and their teams are at their very busiest ensuring that clients’ allowances are properly utilised...

Sign up to the IFA Magazine Newsletter

Trending articles

IFA Talk logo

IFA Talk is our flagship podcast, that fits perfectly into your busy life, bringing the latest insight, analysis, news and interviews to you, wherever you are.

IFA Talk Podcast - listen to the latest episode

x