#2 Release of capital to SIPP operator despite no change in risk of consumer harm

Number 2 in a series of headscratchers about SIPP capital adequacy proposals

A SIPP operator that is stagnant (same number of SIPPs, no change in underlying investments) from one year to the next should not be able to release Financial Resources should the market value of those investments fall.

Being able to do so increases the risk of consumer harm.

A small SIPP operator with £250m of assets under adminstration and 40% of its SIPPs in commercial property would be able to release £63,000 from the business if the market value of the assets under administration fell by 15%.

It does not follow that the cost of winding-down has fallen.

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