UK's FCA places restrictions on KBFS over BSPS redress concerns

The UK's Financial Conduct Authority has imposed a number of restrictions on KBFS Financial Limited (KBFS), due to concerns that the firm failed to pay redress awarded to former members of the British Steel Pension Scheme by the Financial Ombudsman Service (FOS).

As reported by our sister publication Pensions Age, the FCA’s investigation found that that the firm failed to pay redress awarded by the FOS in relation to unsuitable pension-transfer advice given to 5 clients with a defined benefit (DB) occupational pension scheme with British Steel.

The FCA also raised concerns that the group was failing to engage in an open and cooperative way, after KBFS failed to provide it with information requested about its financial position and the FOS awards it was due to pay out.

The FCA has therefore imposed a number of restrictions that will prevent the firm from carrying on any regulated activities and restricting access to its assets.

This includes new requirements that prevent the firm from disposing of, withdrawing, transferring, dealing with or diminishing the value of any assets it holds or receives, without the prior written consent of the watchdog.

This is not the first time that the FCA has taken action to ensure that former BSPS members receive the compensation they are owed, previously using emergency powers to introduce new rules to prevent financial advice firms that advised members of the BSPS from disposing of assets to avoid paying compensation.

It also previously placed limits on two former BSPS advisers following concerns they did not have adequate resources, taking advantage of the emergency powers in light of the risk that some firms will take steps to get rid of their assets if the rules were consulted on first.

The watchdog also had to formally require firms to stop making unsolicited settlement offers to former members of the BSPS, following concerns that that this could be a “deliberate attempt” to exclude former members from participating in its redress scheme.

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