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IPAs face regulatory setback

The IPA risks falling into a “regulatory vacuum” unless there is a quick overhaul of current regulations.

The potential blow comes in the wake of Autif&#39s response to the Government&#39s consultation paper on the new pension wrapper, which is designed to dovetail into stakeholder.

Autif is concerned that if an IPA manager needs to be a separate entity to the pension provider or investment company, it may need clearance from the regulator.

If this is the case, it would be unlikely that IPAs would be ready to launch alongside stakeholder in April 2001.

Autif is asking the Treasury for reassurance that the IPA will not produce an extra layer of administration and hamper providers&#39 efforts to provide low-cost products.

It also wants fund managers to be allowed to establish a separate IPA share class within investment funds to distinguish it from non-IPA holdings which do not attract stamp duty reserve tax relief.

Clerical Medical pensions strategy manager Nigel Stammers says: “IPAs are floating in a regulatory vacuum. The IPA manager might need to be a legal entity with its own capital adequacy requirements. You need separate IPA managers to ensure portability but this will require a duplication of records and efforts and is likely to bust the 1 per cent cap for stakeholder.”

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