SIPP PROBLEM

[BenValue]

In my Barclays Wealth SIPP I owned 111,617 Asian Citrus Holdings Limited shares. I understand that the LSE suspended trading in this company on 29 September 2016. On 1 September 2020 the company resumed trading on the Hong Kong exchange.
My SIPP provider said I can’t hold the Hong Kong shares in my SIPP.
They say “ in order to receive the Hong Kong shares I would have needed a certificate which is not possible in a SIPP as under SIPP regulations you can’t remove stock only cash”
Also they said “We also can’t just sell the shares as what you hold now is the UK line of stock which is delisted and not trading”
They conclude that there is nothing they can do “unless they start trading again in the London Stock Market”

I understand that other shareholders have received share certificates in the Hong Kong listed company. It seems wrong that I loose my shares simply because they were held in a SIPP.
Any thoughts or advice would be really appreciated.

[Dod101]

In my Barclays Wealth SIPP I owned 111,617 Asian Citrus Holdings Limited shares. I understand that the LSE suspended trading in this company on 29 September 2016. On 1 September 2020 the company resumed trading on the Hong Kong exchange.
My SIPP provider said I can’t hold the Hong Kong shares in my SIPP.
They say “ in order to receive the Hong Kong shares I would have needed a certificate which is not possible in a SIPP as under SIPP regulations you can’t remove stock only cash”
Also they said “We also can’t just sell the shares as what you hold now is the UK line of stock which is delisted and not trading”
They conclude that there is nothing they can do “unless they start trading again in the London Stock Market”

I understand that other shareholders have received share certificates in the Hong Kong listed company. It seems wrong that I loose my shares simply because they were held in a SIPP.
Any thoughts or advice would be really appreciated.

Something is contradictory here.

1. You can't hold Hong Kong shares in a SIPP

2. What you now hold is the UK line of stock which delisted and is not trading.

So which do you hold? If it is 'the UK line of stock' then it cannot be that you hold 'Hong Kong shares'. Their conclusion sounds about right to me, that there is nothing they can do unless the shares start trading again on the LSE. Yu may not like that but if that is the case, not much you can do about it.

Dod

[scrumpyjack]

Presumably the company will have issued HK share certificates to all shareholders and the UK listed shares no longer exist, in which case it is incorrect to claim that you have unlisted UK shares. Your Sipp manager must have received the certificates but is unable to lodge them in your Sipp, even though that is the legal beneficial owner of them. You could ask them what they have done with them? One would have thought there are rules for this sort of thing? If the manager has received the share certificate they hold them as trustee for your Sipp and should be able to sell them as trustee and credit the proceeds to your Sipp. I suspect they just can't be bothered to deal with an unusual situation.

You could perhaps contact the company secretary for clarification of exactly what has happened?

[mc2fool]

Hmmm ... I don't have an answer for you but AFAIAA there's no regulatory reason why foreign company stocks can't be held in a SIPP, so that part is just a Barclays Wealth restriction. Indeed, on a quick google I see that Interactive Investor allows buying them in a SIPP.

https://www.ii.co.uk/shares/asian-citrus-holdings-ltd/SEHK:73

As well as scrumpyjack's suggestion, I'd try contacting Investors Chronicle and the like to see if they can offer any advice.

[BenValue]

This is the web chat I had with Barclays wealth:

Barclays rep: I have just had a chat with my technical team and a lot of the issues fall from the shares being in the SIPP. In order to receive the Hong Kong shares you would have needed a certificate which isn't possible in a SIPP as under SIPP regulation you can't remove stock.

We also couldn't have held the Hong Kong shares regardless on the platform.

A certificate would have been required as you had what would be considered the UK line of stock. Due to the delisting, the reason for the certificate would have been to carry the line of stock from the UK line to the HK line.

As you had these shares in a SIPP a certificate was not possible as under SIPP regulation you cannot withdraw stock only cash.

We also can't just sell the shares as what you hold now is the UK line of stock which is delisted and not trading.

ME: If we can locate the shares can I sell them?

BARCLAYS REP: What you hold now is the UK line of stock which is delisted and not trading.

ME: Who owns the equivalent Hong Kong shares?

BARCLAYS REP: You were unable to receive the Hong Kong shares in the first place due to SIPP regulations.

ME: so are the equivalent Hong Kong shares impossible to obtain?

BARCLAYS REP: That's correct. As a certificate would have been required to facilitate the change to the Hong Kong shares, and a certificate is impossible with the shares being in a SIPP.

ME: so a share certificate cannot be issued to me?

Barclays Rep: That's right.

Me: so there is nothing I or my executors (if I die) can do. The shares are worthless

Barclays Rep : They have delisted on the London Stock Exchange and we can't cross border the stock or take them out the SIPP so he can't trade them unfortunately.

Me: so the shares are in effect impossible to trade and therefore worthless? There is nothing else I can do?

Barclays Rep: Unless they started trading again in the London Stock Exchange I'm afraid so

[BenValue]

Many thanks for your replies. They are really appreciated.

I will try and contact the company secretary and investors chronicle.

I also wonder if there is a SIPP regulator I could complain to?

I am not sure if this situation is unusual or unique. Possibly the lesson is to make sure your SIPP provider has the ability to hold foreign shares.

[Dod101]

Many thanks for your replies. They are really appreciated.

I will try and contact the company secretary and investors chronicle.

I also wonder if there is a SIPP regulator I could complain to?

I am not sure if this situation is unusual or unique. Possibly the lesson is to make sure your SIPP provider has the ability to hold foreign shares.

As mc2fool says, a SIPP can certainly hold foreign shares. I hold for instance Toronto Dominion Bank shares in Canadian Dollars, but if you hold London delisted shares that point is irrelevant. What you need to know is has the company offered any compensation in the form of cash or Hong Kong listed shares in lieu of the now delisted London ones? Once you have the facts you can decide what to do about the situation. I guess the company secretary would be a good place to start.

Dod

[Midsmartin]

Or Radio 4 Moneybox. If they decided to feature it, at worst you would get some sort of goodwill payment from Barclays I imagine.

[pochisoldi]

Me: so the shares are in effect impossible to trade and therefore worthless? There is nothing else I can do?

Barclays Rep: Unless they started trading again in the London Stock Exchange I'm afraid so

I call BS.

The UK listed shares were owned by the SIPP trustees on your behalf.
The new HK listed shares are still owned by the SIPP trustees, unless somehow they managed to "alienate"/disown the shares.
If they are still owned by the trustees, then you have a right of action, as they are not acting in your best interests.
If they have disowned the shares, they have thrown away your money.

IMHO This is a clear failure to administer the SIPP correctly. I would make a written complaint stating the circumstances, requesting a resolution in one of two ways:
1) They sell the shares and credit the proceeds to your SIPP
2) They compensate you for disposing of the shares, by placing you in the same position that you would have been (1) above had happened. (and putting the compensation into your SIPP in place of the proceeds of sale).

You also might want to make a subtle note about the time you have spent dealing with this matter since the shares began to trade on the HK stockmarket again.

If they refuse - take it to the financial ombudsman. You can't let them get away with confiscating the shares just because they couldn't be bothered to find a solution.

[mc2fool]

Ok, a few things (none of which will provide an answer to the problem)...

Firstly, I'm trying to decipher your exchange with Barclays and I note two things in particular:

a) they say that under SIPP regulations you can't remove stock, only cash, but you are not asking to remove anything, and
b) they don't actually answer your question, "Who owns the equivalent Hong Kong shares?"

I suspect that what has happened is that their nominee has received a certificate for the HK holdings and, whereas if it had been a broker that dealt with HK shares they'd have simply de-materialised it into your SIPP, as they don't do HK stocks they can't do that and they have no internal mechanism to sell it off and credit your SIPP with the cash proceeds, leaving their supposed only alternative of sending you the certificate, which they can't do 'cos of the claimed regulations.

Now, as far as I'm aware, you're also not allowed to withdraw shares from an ISA, again, only cash, but I've found the following on another forum:

26/3/2021 14:04 "Mine were AIM shares held in an ISA at EQI. When they were delisted from AIM They were reregistered in Jersey with Computershare as EQI said they were unable to hold them as they were no longer CREST eligible. I got a certificate and I still get reports and voting forms from Hong Kong."
https://uk.advfn.com/stock-market/london/asian-citrus-ACHL/share-chat

Which is rather curious, to say the least. It may be worth signing up to that forum and digging through that whole thread, and also contacting the registrar (phone number in thread).

In regards to a regulator, it'll be covered by the Financial Ombudsman Service (FOS), https://www.financial-ombudsman.org.uk/, however they won't consider taking up your complaint until and unless you have made a formal complaint to Barclays and they have given you their full and final response which you are unhappy with, or eight weeks have passed without you receiving a full and final response from them. See how to do it here: viewtopic.php?p=395927#p395927

You can try specifying a remedy as per pochisoldi's post above, although I'm not sure what your position would be if they say, ok, well we don't handle HK shares so we'll have to contract it out, and so there will be a selling fee of £££lots.

Note that if it does end up with the FOS you can expect it to take absolutely yonks (last reports I read on TLF said several months just to assign a case handler); the real value of the formal complaint is to get it escalated up the the chain at Barclays, and to show that you're not going to just go away.

I would still, however, recommend contacting the company secretary, the registrar (Computershare?) and the likes of the Investors Chronicle first, to be sure of all the relevant facts and get your ducks in a row. And you never know, if an FT journo calls them about it (the IC is an FT publication), that may just help things along. Fingers crossed....

[scrumpyjack]

Yes certainly get definitive information from the company secretary. Then you could write to the money pages of one of the National Newspapers. They love having a story like this, and if Barclays are confronted with the Telegraph or Times, they will do anything to avoid negative publicity. This would be a lot quicker than going via the regulator!

[pochisoldi]

Now, as far as I'm aware, you're also not allowed to withdraw shares from an ISA, again, only cash, but I've found the following on another forum:

The shares are held in a SIPP. It's highly likely that any attempt to pull the shares out of the SIPP will trigger some kind of HMRC event.
If the OP is over 55 this will probably be some kind of benefit crystallisation event, if they are under 55 (or if the transfer of the certificate is done outside the SIPP scheme rules) then it may become an "unauthorised payment" which will cost the pension scheme member at least 40%.
(See: https://www.gov.uk/guidance/pension-sch ... d-payments )

So whereas an shares held within an ISA might be capable of being transferred out, there are tax implications (one or more of: income tax, BCE/life time allowance charges/unauthorised payment charges) for the customer if there's any kind of payment out of the pension scheme.

If there is compensation for time+effort (e.g. £75 for time and effort), then this can be paid to the scheme member without any pension fund tax implications. Any proceeds from selling the shares or derived from the shares must stay in the SIPP wrapper, otherwise the "problem with Barclays" gets compounded. That's why the "what I want you to do" paragraph of the complaint should be explicit about how the proceeds from the shares are handled.

[mc2fool]

Now, as far as I'm aware, you're also not allowed to withdraw shares from an ISA, again, only cash, but I've found the following on another forum:

The shares are held in a SIPP. It's highly likely that any attempt to pull the shares out of the SIPP will trigger some kind of HMRC event.

Ah, yup, I'm aware that they're in a SIPP ... I have been paying attention.

I don't think the tax point is relevant as that'd (potentially) also apply if cash was withdrawn, and Barclays states that under SIPP regulation you cannot withdraw stocks, only cash. So there is no possibility to trigger an HMRC event by pulling the shares out, as that can't be done, and nobody has talked about pulling any cash out.

My point in referencing the ADVFN thread was that there appeared to be someone there in a similar situation (albeit with an ISA, which I thought one also could not withdraw stocks from, only cash) and so it might be worth the OP signing up and digging through that whole (269 page!) thread, to see if there's anyone else there who has had a similar SIPP experience (who knows, maybe even a Barclays one!) Sorry if the last point was only implicit.

[yieldhog]

I held Mapeley shares which delisted and hence there was no longer a market for them.

As far as I understand, HMRC do allow stocks to be taken out of a SIPP through a Connected Party Transaction. I went through this process with my SIPP Trustee and eventually received the Mapeley stock certificate, which I keep in my safe.

I went through this process so that my heirs would not have problems with the SIPP when they inherit.

See my posts on this for full details on how to complete the process legally within HMRC rules.

Hope this helps.

Y

[mc2fool]

I held Mapeley shares which delisted and hence there was no longer a market for them.

As far as I understand, HMRC do allow stocks to be taken out of a SIPP through a Connected Party Transaction. I went through this process with my SIPP Trustee and eventually received the Mapeley stock certificate, which I keep in my safe.

I went through this process so that my heirs would not have problems with the SIPP when they inherit.

See my posts on this for full details on how to complete the process legally within HMRC rules.

Hope this helps.

Links would have helped.

I take it you're referring to viewtopic.php?p=277395#p277395 and viewtopic.php?p=277094#p277094 and those that follow?

[yieldhog]

Try this.

viewtopic.php?f=15&t=14820&p=441365&hilit=mapeley#p441316

Y

[BenValue]

Wow, I am amazed by all your incredibly helpful advice.

I will start with the Barclays complaints procedure and then try the financial ombudsman if necessary.

Pochisoldi mentioned that the SIPP trustees owned the shares on my behalf. This is what I thought and that the Barclays SIPP nominee trustee would be named as owner with the company registrar. Barclays web chat told me this was not correct and my name would be held with computershare in Jersey. Computershare in Jersey are unable to find the shares in my name. This is another confusing matter that I will need to look at.

This could be a long battle and I will update this thread on progress. Many thanks once again for all the helpful contributions.

[mc2fool]

Pochisoldi mentioned that the SIPP trustees owned the shares on my behalf. This is what I thought and that the Barclays SIPP nominee trustee would be named as owner with the company registrar. Barclays web chat told me this was not correct and my name would be held with computershare in Jersey.

That doesn't sound right to me ... I thought the whole reason that the value of pension pots (SIPPs, etc) didn't come under inheritance tax was that you do not own them, being owned by the trustees who can actually distribute them as they think fit when you pop off.

I suppose it's possible that they could be registered as belonging to "Barclays Trustees for Mr BenValue's SIPP" or something like that, but I rather suspect that in your web chats you are talking to a first-line agent who is just under-informed.....

[BenValue]

At last my problem with Barclays Wealth has been resolved. I received this email:-


“I’m happy to confirm we came to an agreement with Computershare and the process
of re-registering the above stock in your name has been initiated.
 
When we first spoke, you were upset with the information given as it caused you to believe
your shares were gone. Having read through the web chat conversations, we advised you to
use your own name as the shareholder when contacting Computershare. This isn’t correct as it
would be in our SIPP nominee name and is why Computershare couldn’t locate your holdings.
This led you to understandably worry your shares were missing and I’m sorry for this mistake.
 
Due to the inconvenience caused by this error, I will be arranging for £50 to be paid into your
nominated bank account

[pochisoldi]

£50? Are they taking the proverbial?