If there are questions regarding the application process do not hesitate to contact the Agency via firstname.lastname@example.org
Application to enter into a fund agreement
The below picture illustrates the overall process from the application for a fund agreement to an eligible fund on the premium pension fund platform.
1. Application and fee
The application process begins by the fund manager submitting an application form including appendices and paying the application fee.
The application fee for a fund manager's first application to enter into a fund agreement is currently SEK 75,000. For the application to enter into additional fund agreements, the fee is SEK 10,000 per fund agreement.
To ensure a smooth process, it is crucial that the application is complete and contains all the specified parts and appendices. An incomplete application may be rejected, which means that the application is inadmissible.
Before rejecting an application, the Agency shall request completion of outstanding parts. An incomplete application may cause the process to take longer.
2. Assessment of the application
The Swedish Pensions Agency performs an initial review of the fund manager and the fund to which the application refers, to ensure that they meet the applicable legal requirements, the terms and conditions of the fund agreement, and are in a position to continuously comply with the terms and conditions of the fund agreement.
In connection with the assessment of the application, the Agency may contact the applicant to, for example, request additional information or to provide information about the Agency's intent with respect to, for example, fund type and management group.
If the Swedish Pensions Agency is considering rejecting an application, the Agency sends a notice to the fund manager where the fund manager is given the opportunity to submit additional information and comments before a decision is made.
3. Decision in the application matter
The Swedish Pensions Agency decides to approve or reject an application. If an application is approved, a fund agreement is entered into and the fund manager is notified of the decision in writing. A rejection decision does not in itself prevent the fund manager from submitting a new application at a later date.
4. The fund is established on the fund platform
If a fund agreement is concluded, the fund shall be established on the Swedish Pensions Agency's fund platform. The establishment takes place in several stages and requires administrative measures to be taken by both the Swedish Pensions Agency and the fund manager. For identification on the fund platform, the fund is assigned a fund number.
Based on investment policy, the funds are divided into approximately 30 different fund categories. Most of the day-to-day trading and fund information goes through the Agency's fund communication system Focus, which the fund manager accesses through the SecurID tokens.
Information about the fund shall be made available to premium pension savers and instructions regarding order management and reporting shall enable functioning trade and administration.
5. The fund is eligible on the fund platform
Once the establishment is complete, trading in the fund on the platform can begin. This means that the fund is eligible for pension savers on the Agency's website and that premium pension capital can be invested in the fund.
Application documents, instructions, and fund agreements
This translation of the fund agreement into English is available as a service. The fund agreement is written in Swedish.
Allowed languages in Fund Agreement application are:
- Application form: Swedish
- Fund agreement: Swedish (an English version is available for reference)
- KIID appendix: Swedish
Other appendices: Swedish, although some documents attached to the application may be in English. Please refer to the "Bilagor som kan bifogas på engelska 1.0.pdf" document below.
As a consequence, foreign applicants may incur costs, e.g. for translation, that potentially could have been avoided in case a wider range of languages would have been allowed. The range of allowed languages reflects perceived resources of applicants relative to those costs mentioned, as well as the Swedish Social Insurance code, Swedish administrative law, EU member states’ room to require national language requirements according to EU law, the Swedish Language act, regulations regarding transparency of public acts and the Swedish mutual fund act.
Please note that it is the 3.0 version of the fund agreement in Swedish that is the legally binding version of the fund agreement. The English translation is only available as a reference. An application to enter into a fund agreement must include two original copies of the fund agreement in Swedish, each signed and initialled on each page of the agreement by the fund manager’s representative, including the front page.
The Fund Agreement 3.0 - English translation
Fund agreement 3.0
During the contract period
Once the fund has become eligible on the fund platform, the Agency will continuously review the fund’s and the fund manager’s compliance with the Social Insurance Code and the terms and conditions of the fund agreement.
If any changes are made in relation to the information provided at the time of the application, based upon which the Swedish Pensions Agency made its assessment and decision to allow the fund manager to offer a fund on the premium pension fund platform, it is important that the Agency is notified hereof.
During the contract period, the fund manager pays an annual audit fee that currently amounts to SEK 32,000 per fund. In addition, the fund manager is responsible for the cost of any mailings to premium pension savers due to information needs related to, for example, fund events or other measures taken by the fund manager.
The price reduction model applied pursuant to the fund agreement, which is described in detail in Appendix A to the fund agreement, means that the fund manager receives an invoice from the Swedish Pensions Agency every quarter. The invoice amount corresponds to the estimated reduction in fees to be paid to the Agency by the fund manager in accordance with the fund agreement. Following price reduction, a fund's fee cannot exceed 0.68 percent for an equity fund, 0.35 percent for a fixed income fund and 0.44 percent for other funds (mixed funds and generation funds).
The size of the price reduction also depends, inter alia, on the size of the amount the Swedish Pensions Agency has invested with each management group.
On the Swedish Pensions Agency's website, the premium pension saver can see both the fund's annual fee and the fee the saver pays adjusted for the price reduction.
Trade and administration
All trading in fund units is done through the Swedish Pensions Agency's Focus system. The fund manager shall, on an ongoing basis with some frequency, report on fee charges, costs in the fund, acceptance of trading orders, share prices (NAV), confirmation of executed trading orders, information on trading days, reporting of holdings and any dividends from the fund.
This is largely done manually as the Swedish Pensions Agency does not have automated fund trading. The Swedish Pensions Agency imposes requirements on daily trading with the exception of what is stated in the fund's trading calendar. The detailed reporting requirements are set out in the Fund Agreement, see in particular Appendix B and in the Focus Manual.
During the contract period, the fund manager is responsible for providing certain information to the Swedish Pensions Agency on an ongoing basis as set out in the terms and conditions of the fund agreement.
Pension savers have the opportunity to obtain information about individual funds and to carry out various comparisons on the Swedish Pensions Agency's website. The Swedish Pensions Agency therefore collects, processes, and quality assures the fund information. The collection of data is done through a web interface where the fund manager is responsible for and inputs the data. For information on the registration process, please see the Focus Manual.
Update of fund information with time intervals
In Focus Fundinfo, fund managers shall also update certain information with a certain time interval. All texts must be presented in Swedish.
|Initially and upon change||
In order to comply with the fund agreement, the fund manager shall, in addition to the continuous disclosure, also inform about fund events and other changes relevant to the contractual relationship.
The duty to provide information includes circumstances relating to external asset managers, any recipient fund and its fund managers, as well as related parties.
The Swedish Pensions Agency shall, without delay, be notified of, for example:
- Legal incidents such as sanctions and injunctions from public authorities, permit issues of importance.
- Changes to the fund's investment policy, change of benchmark index, if assets under management outside the premium pension system are less than the statutory requirement of SEK 500 million.
- Trade issues that may lead to problems in connection with ordering such as lack of liquidity in relevant markets, investment-related matters such as split/divisigon of shares, trading halts in connection with mergers, for example.
- Merging of funds and transfer of fund management.
- Changes in fund rules and prospectus.
- Changes in ownership structure, composition of the board of directors, management team, and those responsible for control functions.
- Dependencies and conflicts of interest.
- Any comments made by the depositary regarding, for example, valuation issues.
- Change of external asset manager, depositary, management company.
- Changed fees and remuneration models.
Questions and answers regarding fund agreements and the fund platform
Please note that the Swedish Pensions Agency does not provide any advance notice regarding specific issues or individual application cases. The answers in the Q&A are for guidance only. The final assessment of the Swedish Pensions Agency is set out in its decision in each individual case.
Who can enter into a fund agreement?
A fund manager, UCITS, or management company referred to in Chapter 1, Section 1 of the Investment Funds Act (SFS 2004:46) (fund managers) that meets the requirements of the Social Insurance Code and the terms and conditions of the fund agreement.
What is the cost of entering into a fund agreement and offering a fund on the fund platform?
The Swedish Pensions Agency shall charge fund managers for processing the application to enter into a fund agreement (the application fee is currently SEK 75,000 for the first application and SEK 10,000 for each additional application), the fee for annual review is SEK 32,000 per year and fund, and the actual cost of any mailings to pension savers with information about funds. In addition, the fund manager shall reimburse the price reduction agreed in the fund agreement, specifically in Appendix A.
Please note that the application fee must be paid before the Swedish Pensions Agency starts processing the application.
Can you sign the application form and the fund agreement electronically?
No, at present the Swedish Pensions Agency cannot accept e-signatures.
Information to the Swedish Pensions Agency
The fund agreement contains a number of conditions regarding a fund manager's obligation to provide certain information to the Swedish Pensions Agency, sometimes within a specified time. The fund manager shall, inter alia, notify the Swedish Pensions Agency of significant changes regarding the fund and the fund manager’s organisation and activities etc. of importance to the fund agreement and the cooperation with the Swedish Pensions Agency. The duty to provide information may refer to, for example, sanctions and investigations, change of external asset manager, new owners or board members, and may also include circumstances relating to, for example, related parties and external asset managers. The reason why the Agency needs to have certain information is both in order to ensure contractual compliance with respect to, for example, suitability and for the Agency, as an insurer and platform owner, to be able to implement the necessary changes to the Agency's system. The Agency shall also inform the relevant pension savers in writing of any changes that the Swedish Pensions Agency considers relevant to the fund choices of pension savers.
Why is a fund subject to a trading halt and what does it mean?
A fund may be subject to a trading halt while the Swedish Pensions Agency reviews a new circumstance in relation to the terms and conditions of the fund agreement, if a fund manager or fund is deemed to be in breach of a contract term, or if a fund agreement has been terminated, for example in connection with a merger, and the fund's last trading day has passed. A trading halt means that the fund is currently not available to pension savers and no new funds are invested in the fund.
What is a management group and what role does it play?
A management group consists of a group of funds that have a marketing and/or brand connection through fund managers, external asset managers, or a group of companies. The Swedish Pensions Agency's decision on which management group a fund should belong to may affect the calculation of the price reduction to be paid by the relevant fund managers to the Swedish Pensions Agency.
What happens if a fund has less than SEK 500 million in assets under management outside the premium pension system?
In order to operate on the fund platform, a fund must have at least SEK 500 million in assets under management outside the premium pension system. This is a legal requirement as well as a contract term. The size of the capital shall meet the requirements at the time of the decision regarding a fund manager's application and thereafter on an ongoing basis throughout the contract period. Capital from the fund manager's own funds and from funds within the group of companies or management group of which the fund manager is a member may not be included in assets under management outside the premium pension system. The same applies to any external asset manager's funds.
If a fund covered by a fund agreement at any point has less assets under management outside the premium pension system than required, this constitutes a breach of contract and the fund manager shall notify the Swedish Pensions Agency hereof without delay. If the externally managed capital is not restored within a certain period of time, the fund agreement may be terminated.
What is required for the track record to be relevant and representative?
The requirement for a relevant and representative track record means that, according to the Swedish Pensions Agency's assessment, the fund's investment policy, risk profile, etc. must not have changed or change significantly in the last three years. The purpose is to enable the evaluation of the fund and its management.
In order to comply with good practice in the premium pension area, the fund shall also meet the requirement of at least three years of continuous, relevant and representative track record on an ongoing basis during the contract period.
The Swedish Pensions Agency therefore especially reviews the fund's fund rules, annual reports, portfolio composition, and benchmark indexes. Particular focus is placed on asset classes, targeting certain geographical areas or industries, distribution between small/medium/large companies, duration, etc. that do not fit with the fund's investment policy, the way in which the fund has been marketed or the consumer protection perspective that the Agency has to consider.
How are fund mergers handled on the platform?
If funds are to be merged, it is important that the Swedish Pensions Agency receives information about this well in advance of the merger. If the acquiring fund is not covered by a fund agreement, but the fund manager wishes it to be, the acquiring fund manager must apply for this so that the Swedish Pensions Agency has time to review the application and inform the affected pension savers of the merger well ahead of the last trading day.
What requirements does the Swedish Pensions Agency have on sustainability in the management of the fund?
The Swedish Pensions Agency’s minimum requirement is that all fund managers and external asset managers that, to any extent, provide asset management in the fund or other funds in which the fund invests shall have signed and be subject to the UN Principles for Responsible Investment (PRI), or be subject to the signing of PRI principles made by another legal person within the fund manager's or the external asset manager’s group of companies. Furthermore, it is a regulatory requirement and a prerequisite for entering into a fund agreement that fund managers submit and undertake to submit the information set out in the Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector. The Swedish Pensions Agency may also request other information about a fund manager's sustainability work, etc. The information shall primarily be provided by the fund manager via the Agency's website.
Customer due diligence (KYC) Swedish Pensions Agency
The Swedish Pensions Agency is a shareholder and thus a customer of the fund managers who offer funds on the platform. For this reason, the Swedish Pensions Agency may be the subject of a fund manager's questions regarding, for example, KYC and money laundering. The premium pension system is a closed system and the capital originates from the social pension contributions that employers pay to the Swedish Tax Agency based on income. For more information, please contact the Swedish Pensions Agency.
What is the definition of an external asset manager?
External asset manager (often referred to as investment manager) is a legal person that the fund manager engages or cooperates with for asset and fund management services. External asset managers and fund managers may be part of the same group of companies.
What happens when the external asset manager is replaced?
A fund manager shall inform the Swedish Pensions Agency of the replacement or addition of the fund's external asset manager so that the Agency can assess whether the external asset manager meets the terms and conditions of the fund agreement and can make adjustments in its systems.
Why does the Swedish Pensions Agency consider certain holdings in own funds inappropriate?
Inappropriate investments violate the code of conduct in the premium pension sector. Inappropriate investments include, inter alia, investments in funds within the same group of companies or an external asset manager’s group of companies (feeder funds and investments based on an objective analysis are exempted). The reason for this is the risk of unchecked conflicts of interest. Examples of holdings that may be allowed are non-fee paying index funds and funds where the investment is only aimed at temporarily managing the fund's cash flow.
What happens when a fund manager takes over the management of a fund?
A fund manager who takes over the management of a fund must apply to enter into a fund agreement covering the fund. This applies regardless of whether the fund and/or fund manager are already on the Agency's fund platform, as each fund manager must enter into a fund agreement for each fund they wish to offer. Even if the fund agreement cannot be formally transferred to another fund manager, the acquiring fund manager shall assume obligations related to the fund agreements of former fund managers as set out in the fund agreement.
How do you terminate a fund agreement?
The fund agreement is of indefinite duration. A party always has the right to terminate the fund agreement, subject to the notice periods set out in the fund agreement. In the event of certain special circumstances which prevent the fund or fund manager from participating on the fund platform, it is the fund manager's duty to notify the Swedish Pensions Agency thereof and terminate the fund agreement. Before the expiration of the fund agreement, a plan for winding-up must be developed and implemented and the Swedish Pensions Agency shall inform the relevant pension savers.