Owners of shares in Allra funds available on the Swedish PPM platform are likely to have to wait until the end of next week for any fund switching orders to clear, according to platform operator the Swedish Pensions Agency.
The announcement follows a court order halting the Agency’s unilateral decision to de-register Allra funds from the platform and enforce a sell order on all shares. As highlighted last week by InvestmentEurope, there are considerable changes expected to hit the platform later this year in the wake of concerns from the Agency that long term savers’ money may be at risk from certain providers and their products. However, its decision in regard to Allra has been blocked by the latest round in Sweden’s court system; this has stopped the de-registration process. the Agency said it also meant that its enforcement order on shareholders had also been lifted.
However, because of the earlier enforcement action, there was now a backlog of fund switching orders that the PPM platform needs to process, which meant that any user initiating a fund switch on an Allra fund shareholding would have to wait until the end of next week for this to clear. This also depends on whether “Allra opens its funds for sales” the Agency said.
The Agency announced on 14 February that it had put a stop on all purchases of Allra’s four funds available on the PPM system. At that time it said some 130,000 long term savers had put SEK19bn (€2bn) into the funds. The Agency cited a need to better understand what underlying holdings were in the funds, as well as noting a significant level of complaints made against the fund manager to its own customer service operations. The Agency cited the agreements it signs with all provider firms using PPM to distribute their funds, including commitments in areas of customer service levels and marketing, as giving it the authority to make decisions on whether to force providers and their funds off the platform.
By 16 March, the Agency moved to de-register all four of Allra’s funds from its platform, citing its investigation, which it said had found failures in the manager’s ability to explain how certain “large internal transactions” had been to the benefit of its customers.
On 24 March, an Administrative Court of Appeal decision announced a reversal of the de-registration until such time that the case could consider counter-arguments by the Agency to the points raised by Allra in its appeal. (The full court decision is available here: http://www.kammarrattenistockholm.domstol.se/Domstolar/kammarrattenistockholm/Domar/2017%20jan-juni/Beslut%20i%20m%C3%A5l%20%201684-17.pdf)