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FSA writes to Sipps requesting details of Harlequin investments

FSA Front Door 480

The FSA has written to Sipp operators requesting information on members who have invested in Harlequin Property.

The regulator contacted Sipp firms last Thursday asking whether any of their clients have holdings in the overseas property company.

Any firm whose members have investments in Harlequin have five working days to provide the FSA with details of the investments.

Those who do not have any exposure to Harlequin had two working days to respond.

This follows an alert issued by the regulator in January which said it had seen an increasing number of Sipps with underlying investments in overseas property purchased through Harlequin.

The alert said: “If a financial adviser recommends a Sipp knowing that the customer will sell current investments to invest in an overseas property, then just how suitable the overseas property investment is must form part of the advice given to the customer.”

The alert goes on to say advisers should conduct thorough due diligence on the developments being sold through Harlequin. It also says advisers should carry out a full assessment of all publicly available information about the overseas property investments through Harlequin Property and all parties associated with these investments.

Barnett Waddingham partner Andrew Roberts says: “We have no exposure to Harlequin and we have rejected all of the overseas property investments that have been presented to us so far.

“If the FSA has concerns about Harlequin, then contacting Sipp operators to find out how many people have invested in it seems sensible.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. The FSA should also ask the providers to state whether the SIPP funds were used as a deposit and the balance of the purchase price funded externally.

    If yes, and I suspect all were set up like this, then the SIPP is guilty of providing the member with a mortgage.

    This is illegal and the SIPP should be subject to a 55% unauthorised investment tax charge.

  2. This news is a few days old already!

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