Number 9 in a series of headscratchers about SIPP capital adequacy proposals
Financial pressure may cause a SIPP operator to exit the market.
This financial pressure may be as a result of external economic forces, such as the current credit crisis which could result in a SIPP operator’s line of credit with a bank may be withdrawn.
This could coincide with low market values (depressed equity markets, property voids, etc).
This would lead to a reduction in the capital requirement just when the risk of exit is at its highest.