TL;DR
The Financial Conduct Authority published consultation CP26/20 on 22 June 2026, proposing mandatory due diligence standards and stronger asset-protection rules for all self-invested personal pension (SIPP) operators. The consultation closes on 24 August 2026.
Last reviewed: 23 June 2026
Key Facts: FCA SIPP Consultation CP26/20
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What the FCA is proposing
The Financial Conduct Authority set out plans on 22 June 2026 to drive greater consistency of standards across the self-invested personal pension market. The proposals come after the regulator identified a pattern of poor due diligence, weak record keeping and gaps in how some firms protect pension money and assets.
The consultation covers two main areas. First, clear standards of due diligence that all SIPP operators must follow when assessing third-party investment arrangements. Second, a new Pension Scheme Money and Assets (PSM&A) regime to protect pension holders whose funds sit in structures not currently covered by the Client Assets Sourcebook (CASS) rules.
Why the FCA is acting now
By 2024, nearly a third of all assets under administration in FCA-authorised defined contribution pensions were held in SIPPs. That growth has not been matched by consistent standards across all operators.
Between 2010 and 2025, 26 SIPP operators became insolvent - a high figure relative to the 98 firms currently operating in the market. Several of those failures were linked to inadequate due diligence on third-party investments, leading to large volumes of upheld complaints at the Financial Ombudsman Service and significant redress liabilities.
A significant number of SIPP operators have structured their business so that an unauthorised trustee company holds pension money and assets. Under this arrangement, the detailed CASS client asset protection rules do not apply. The proposed PSM&A regime is designed to close that gap.
What the new due diligence rules would require
Under the proposed rules, SIPP operators would be required to carry out core checks on all relevant third parties, with additional checks required where higher risks are identified. If a firm cannot satisfy itself that engaging with a third party involves no undue risk to the consumer, it must not enter into - or must exit - the arrangement.
The proposed rules would not apply to schemes offering a limited range of pre-selected investments such as target-date funds or risk-rated model portfolios, where the firm retains responsibility for investment selection and the risk of fraud is considered lower.
Implementation timeline
The FCA has proposed a two-year implementation period following any final rules. An additional one-year period is available for SIPPs with existing third-party relationships where firms have identified data dependencies and developed a plan to address them. Firms unable to meet the minimum record-keeping requirements may need to exit the market.
What this means for SIPP holders
The proposals are designed to improve confidence that pension assets held in a SIPP are properly safeguarded, accurately recorded and subject to effective oversight. The FCA has stated its principal aim is to ensure investments made through a SIPP are genuine and involve a credible investment proposition. The consultation does not change the existing flexibility or investment choice available through SIPPs.
What is a SIPP?
A self-invested personal pension (SIPP) is a type of personal pension that allows the holder to choose and manage their own investments from a wider range than standard personal pensions. SIPPs are regulated by the Financial Conduct Authority.
What is CP26/20?
CP26/20 is the FCA consultation paper titled "Adapting our rules for a changing market: self-invested personal pensions", published 22 June 2026. It sets out proposed rule changes and invites feedback by 24 August 2026.
What is the PSM&A regime?
The proposed Pension Scheme Money and Assets regime would introduce asset protection requirements for SIPPs not currently covered by the Client Assets Sourcebook. It aims to ensure pension money and assets are securely held, accurately recorded and subject to effective oversight.
What is CASS?
The Client Assets Sourcebook is the FCA handbook chapter governing how firms hold and protect client money and assets. Some SIPP operators are structured in a way that places pension assets outside CASS scope, which the proposed PSM&A regime addresses.
When will the new rules come into force?
No final rules have been set. The consultation closes 24 August 2026. Following analysis of responses, the FCA would publish final rules with an implementation period of at least two years.
