Legal Entity Identifiers

I was recently required to obtain a Legal Entity Identifier (LEI) for my company's Small Self-Administered pension Scheme (SSAS). This burnt up a lot of my time and caused me a lot of confusion, so for the benefit of others similarly challenged, I describe my experience.

The pension scheme held some assets in the form stocks and shares which were managed through a internet share dealing account run by a firm of stockbrokers. At the point when I wished to crystallise my part of the pension, I was required by HMRC to draw down my tax free lump sum entitlement. Since this exceeded the cash assets of the scheme, this would have required me to liquidate some of the fund's investments - which I did not wish to do at the time. An alternative would have been to draw down the lump sum and simultaneously loan it back to the scheme. But because HMRC requires that real cash transactions take place, it would have been necessary to find the total amount of the drawdown for long enought to register the transactions - say 5 days. As well as the issue of obtaining this short-term finance, it would have be necessary to set up an arms-length loan agreement at a commercial interest rate and for a period that would have to be agreed with the scheme trustees. Not impossible, but time consuming and inconvenient.

An alternative was to transfer the lump sum as investments (to the same cash value) and this was the route I decided to take. The reason I had not previously considered it were restrictions on in specie transfers, but that is a story for another blog post. At the point I decided to do the transfer, I was advised that this could not happen unless the SSAS had an LEI. This is where the confusion started.

I was advised that the stockbrokers should have contacted me before 3rd January 2018 to tell me that there could be no transactions (buying, selling or transferring shares) on the dealing account until the SSAS had an LEI. They had not done this. I therefore incorrectly inferred that LEI was a requirement on the stockbroker or of the dealing account rather than on the scheme. It is the scheme that requires the LEI.

I followed some recommended links to Stock Exchage site to obtain an LEI for the dealing account....

www2.londonstockexchangegroup.com/register-for-lei. 

This form is one of the best examples I have come across of a bad user interface. In desperation, I contacted the help desk of the stockbrokers. They told me that LEI was an HMRC requirement and nothing to do with the UK Stock Exchange. They gave me a link to an Financial Conduct Authority (FCA) website that might help...

https://www.fca.org.uk/markets/mifid-ii/legal-entity-identifier-lei-update

This in turn told me I should contact an LEI issuing Organisation from the list...

https://www.gleif.org/en/about-lei/how-to-get-an-lei-find-lei-issuing-organizations

Surprise, surprise, the issuing organisation for the UK is the UK Stock Exchange. Back to square one. Except, not quite. This time I forced myself to register for an account and to again overcome my fear of death by "music/warnings on hold" that you usually get with help lines run by large organisations.  I dialled the help line...

LEI Customer Support

lei@lseg.com

+44 (0)20 7797 3300

Note: you will not see this unless you first register.

To my utter amazement, the number was answered by a human in less than a minute.

In this call, I was told all the original documents I needed, the most important of which are...

• HMRC Pension Schemes Services Registration Certificate (Pension Cert 1)
• HMRC Pension Schemes Services Registration Acknowledgement (Practionioner) (APSS 04)
• HMRC Pension Schemes Services Submission

Once you have these documents, scan them to a PDF. You will need to upload them with the form.

I could go through all the fields in the form, but I would recommend you do this while on the helpline call. I assure you that are not in the least bit intuitive.

Remember also that the addresses you give must match those on the documents above. Do not be tempted to use the registered address of your company or your home address unless it is the registration address of the scheme.

The last stage is to pay the fee, which you will need a credit card and if the payee is VAT registered, a VAT number. Finding out how you pay is the least intuitive of all, so it may require a second (or in may case 4th) call back to the help line. Sue, thank you for your help and patience.

If all proceeds well, you should get an email acknowledgement within half an hour, and your final registration number in 3 working days. In my case, I did not receive the registration number but when I followed up a week later, it was provided.

Good luck.

Free will and consciousness

I recently listened to:

In Search of Ourselves: A History of Psychology and the Mind - A Problem of Consciousness - @BBCRadio4Extra
http://www.bbc.co.uk/programmes/b04368f7

Cooincidentally, around the same time, I had a few after dinner discussions about free will. This has prompted me to write down my thoughts on the subject.

The BBC programme repeated the findings of many experimental psychologists (using MRI scanners) that most of the  actions we think of as "conscious" and made by free will are actually not - they can be shown as being made before we were aware of them.

Its quite difficult to convey my conviction about fatalism and our lack of free will without either being missunderstoon or appearing patronising. It is often inferred that to believe in fatalism, you must be some sort of religious nut. I would prefer to use the word "determinism", but it might indeed appear patronising to assume this is not a term familiar to most non-scientists.

If you accept that our thought processes are essentially chemical, then is not much of a case for suggesting that they are anything other than deterministic. This logically leads to the conclusion that everything we do much be a function of our genes (ie our chemistry) and our previous experience. In other words, while we have the illusion of making decisions, we are simply acting out a scenario, that "in principle" could have been predicted. I say "in principle" because, quantum physicists would argue that at the quantum level, things are truely random. Whether this is the case or not is the subject for another post, but even if we are unable to predict the outcome of something, this does not mean that it is intrinsically unpredictable (although physicists would argue that also - but I don't agree). And even if it truly random, then "free will" can, by definition, have no bearing on it.

As you might imagine, bringing quantum physics and MRI scanners into the argument with someone who has not had the benefit of a science education, might be seen as unreasonable and this usually brings an end to the discussion.

Of course, some much greater minds than mine have come to the same conclusion about our lack of free will, and at a time well before even classical (Newtonian) physics had evolved. But those views were pure conjecture and largely philosophical.

Even though I am utterly convinced about the inevitability of it all, it does not mean that I can override the way my brain has been wired by several hundreds of millions of years of evolution. So, much as I would like to be philosophical about some particular sequence of events, unfortunately, it can't override my emotions.

For example, if you follow my logic, you must accept that nobody is responsible for their actions - as indeed I believe. Nevertheless, strong as my logic is, it does not override my evolved emotion to want to lock up murderers or parking wardens. These emotions must be even stronger for those that think they have free will.

If one assumes that free will exists, then an essential pre-requisite is conciousness. The fact that we don't, in my opinion, have free will does not mean we don't have conciousness and ironically, defining consciousness is something that occupies more than its fair share of my thinking time.

I am inclined to agree with Roger Penrose that if we were to construct a computer than faithfully emulated a human brain, while it would react in every way like a human, I don't think it would be aware of its existence. (Of course, if you asked it, it would say it was!) Needless to say, I don't know what the essential ingredient of self-awareness is but I have a gut feeling it is something to do with systems that have evolved as self-referrential - or what is called in computing parlance as recursive. I got this glimpse of enlightenment when reading the preface to Godel, Escher and Bach: the Eternal Gold Band. I hasten to add, that I never got much further than the first chapter, but this was one of the rare occasions I could be bothered to read a preface and actually got something from it.

I shall return to this post when I have something new to add.

Too many choices

I often wonder why it becomes more difficult to find any sort of match when the choice goes up and that the quality of choice, once made, seems to go down. For example, deciding what to eat from a very large menu is often harder than from a menu with just a few options. And once I have made the choice, I find am more likely to think it was the wrong one. You would think that in large, highly populated city, you are more likely to find the perfect matched mate than in a small country village. This appears not to be the case.

Given we only have one brain with limited processing power, the cost of searching a large selection must be much greater than a small selection and give less overall time to deciding if that is the best selection.

A solution I am going to try is to reduce the selection set arbitrarily to 2 and throw out the one I like least, then keep on comparing two at a time until I get through the set.

Wave-partical duality

Reading this question on Quora..

      "How do we know that electrons are point-like particles?"

...reminded me that I have never quite understood the necessity for particle-wave duality. De Broglie postulated that all matter has wave-like properties (and derived the relationship between mass and wavelength) and intuitively it makes no sense to think of matter as anything other than a wave function of some force in space. If two "travelling" waves intersect then at some point, we know experimentally that something clearly often “flips”. Given the exhibited quantum nature of matter, we may well expect some critical threshold to be reached when the wave changes - for example when an electron “orbiting” a nucleus loses enough energy to fall into a lower shell. The reason it simply doesn’t get progressively closer to the nucleus (ie in an analogue fashion), is because it is resonating and it has to have an integer period of oscillation - it is simply not in a stable state otherwise. However, even though it may be intrinsically impossible to measure it, the transition will happen in an analogue fashion. The point or particle-like behaviour does not, to me, indicate that an electron is itself is a particle, merely that some transition state has occured at some localised point in space and time and we could interpret this a point-like behaviour. 

Why do we need any sort of duality?