Number 10 in a series of headscratchers about SIPP capital adequacy proposals

The value of an asset (most notably Non-Standard Assets) may be subjective.  Presumably SIPP operators will need to report AUA to FSA, but in order for the FSA to be confident that the ICR has been calculated correctly, the FSA would need to verify the data submitted.

This would rely on the integrity of the SIPP operator, unless hundreds or thousands of valuations of Non-Standard Assets are checked.

One driver for a move away from the expenditure-based model is, as mentioned in paragraph 2.12 of CP 12/33, to avoid SIPP operators incurring significant extra compliance costs where no measurable benefit is also provided and also to reduce regulatory arbitrage and the cost of manual supervision.

A move to AUA will require more onerous supervision.