Has anyone recently had problems with AIM stocks previously held quite
happily in PEP or ISA now being rejected by their PEP/ISA manager?
It seems there's been a bit of a problem.
AIM listed stocks are not eligible for a PEP/ISA unless they are listed
on an officially recognised exchange (or which there is a definitive
HMRC list - ). Note the use of 'listed'
It seems many stocks are traded on the Berlin Exchange's Third Segment
market from all over the world. However, these are traded, not
necessarily listed (it would seem listing is a lengthy and expensive
process for the company concerned).
There was an article in the Chronic Investor (
) in June highlighting this anomaly (albeit in relation to an article on IHT, but highlighting the issue). In fact, the Investors Chronicle had to revise its facts because it too got muddled.
The IC article is at:
if you have a subscription.
It seems the PEP & ISA Managers Association (PIMA
) have recently issued guidance (dated 7 July 2006) that has caused some
PEP/ISA managers to review their position on affected AIM stocks, on the
basis that AIM stocks that were previously thought eligible because they
were listed on the Berlin stock exchange are no longer eligible because
they were only traded on the Berlin stock exchange (Third Segment), not
listed on the ?Amtlicher Handel?
I have received a letter from my PEP manager giving me 14 days to make
arrangements to move what is now viewed as a non-qualifying AIM stock
from my PEP (several options for removal).
As it happens, now is not a good time to sell the stock in question as
it will sell at a significant loss.
In my view, the PEP manager should be shouldering some of the
responsibility for this situation as they didn't check the eligibility
of the stock before allowing me to buy it in my PEP. I have previously
tried to put other unusual (mostly foreign) stocks in my PEP which
weren't on the manager's standard selection of available PEP stocks and
they have checked and generally refused.
I am also underwhelmed by the manager's 14-day time limit. This
situation has been going on for some time and the PIMA guidance was
issued 7 July. There is nothing in the PEP regulations about a time
limit for this situation (there's is a 30-day time limit for getting
delisted stocks out of a PEP, but that's slightly different). If I were
to get a longer timescale to get out of the now ineligible stock at a
better price, I might be more amenable.
Interestingly, HMRC's April 2006 PEP/ISA bulletin reiterated the
situation regarding qualifying AIM stocks, and can be found at:
so unless PIMA read the IC article in June and got cold feet, it's taken some time after HMRC's April bulletin for it to act.
- posted 14 years ago