Radical change to PPM in sights of Swedish regulator
The Swedish Financial Supervisory Authority, Finansinspektionen, has proposed even tighter restrictions to ensure stability in the country’s PPM long-term savings platform, following on from initial proposals to tighten the rules from platform operator the Swedish Pensions Agency.
Finansinspektionen’s director general Erik Thedéen has said in an interview with Sweden’s biggest financial daily Dagens Industri that there is an argument to 10-fold the minimum AUM requirement for funds available for self-selection on the PPM platform, to a minimum SEK5bn (€513m), and require a 10-year minimum track record, as part of drastic action required to reduce the number of funds on the platform.
According to the minimum AUM and other requirements proposed by the Pensions Agency earlier (see: http://www.investmenteurope.net/regions/swedendenmarkfinlandnorway/support-from-industry-for-all-but-one-of-proposals-to-amend-ppm-platform-rules/ ) there would be a reduction in the number of funds available. DI suggests the range could be cut to some 300 from 800, but the proposals put forward by Thedéen would imply a substantial reduction beyond this – to perhaps as few as 10 funds.
“When you say 10 then it could be a completely different system that is not at all based on funds,” DI quotes Thedéen, who also suggested that the role of the Supervisory Authority is not to improve the competitiveness of funds versus other methods of long-term savings.
Another key point raised by the interview is on the topic of Falcon Funds – the Malta-registered vehicles that are currently the subject of an ongoing investigation by the Swedish Economic Crime Authority (see: http://www.investmenteurope.net/regions/swedendenmarkfinlandnorway/falcon-funds-big-ppm-changes-expected-june/ ). Tellingly, Thedéen does not outright say he trusts the Maltese authorities, but that “there is no reason not to trust them”.
The total market value of assets in PPM as of 31 December stood at SEK983bn (€100bn). Of those using PPM who are pre-retirement, the use of mutual funds accounts for some 10x the amount saved via insurance-based funds, according to the Pensions Agency.