The Swedish Investment Fund Association has warned that the tighter regulations set to be applied to funds seeking distribution through the country’s premium pension system may end up hurting investors because they will cut off competition in the market.
The new regulatory requirements, as reported in InvestmentEurope earlier (see below) will not only require funds to have at least three years of track record and SEK500m in capital outside the PPM system, but also introduce a commission ban.
The Association has previously expressed support for measures intended to improve the protection of investors from fraud or other crimes, but has also noted that some of the proposed new rules would make it harder for platform users to access, say, new funds run by portfolio managers with a long history of running funds in the market, and who are well known to local investors.
The latest comments from the Association’s chief executive Fredrik Nordström came in an interview with local television news channel TV4 (video below in Swedish)
However, the Swedish Pensions Agency, which has a statutory authority to operate the PPM funds platform, has said it is important to implement the new ‘quality control’ measures on funds, to not only protect long term savings, but ensure that the system overall is not undermined by loss of trust. In the Swedish pensions system, a percentage of all obligatory pension savings are directed towards the premium pension. The money can be put into a default fund or into other funds selected by the user.