Administrative Court rules that SIPP operator owed extensive duty of due dilligence
The Administrative Court handed down judgment in R (Berkeley Burke SIPP Administration Ltd) v Financial Ombudsman Service on 30 October 2018, dismissing the judicial review challenge. The claimant sought to challenge a decision of the FOS in relation to an overseas investment held in a self-invested personal pension (SIPP) wrapper. The disputed FOS determination concluded that the claimant SIPP operator owed an extensive duty of due diligence under FCA Principle 2, including to investigate the “appropriateness” of the proposed investment. Mr Justice Jacobs considered the scope and application of the FCA’s Principles (PRIN 2.2.1) and reiterated their width and status as overarching rules in financial services regulation. He also undertook extensive analysis as to the meaning and application of COBS 11.2.19R(1) – that a firm must execute a specific instruction from a client – and the underlying provisions in MiFID. The decision in BBSAL was treated by all parties as a test case and will have wide-ranging consequences for SIPP operators and authorised firms generally.
The Judgment can be read here: Berkeley Burke v FOS – Final Judgment.