The Swedish Pensions Agency will not leave any prior notice on specific questions or specific application cases if it is considered as general information and relevant for the application process. Then the question will be on the Q&A –section.

The answers in the Q&A-section is for guidance only. The final interpretation and decision will be made by the Swedish Pensions Agency in connection with the assessment of an application for a Fund Management Agreement from a Fund Manager.

If you can't find the answer to your question below you can contact us at QandA@pensionsmyndigheten.se

Background to changes in the Premium Pensions Fund Platform 2018

On May 31, 2018, the Swedish Parliament decided to introduce certain legislative changes for a safe and sustainable premium pension scheme.

The new rules imply, among other things, that all funds on the Premium Pension Fund Platform need to re-apply, and must meet the new requirements for inclusion.

The first step in this process took place on June 4^th, 2018, when the Pensions Agency sent out notices of termination. All existing Cooperation Agreements will be terminated.

The Fund Agreement will replace all previous agreements and Fund Managers with an existing Cooperation Agreement will need to re-apply to be able to enter a Fund Agreement, and maintain their funds on The Premium Pension Platform

The amendment of the law will be effective on November 1^st, 2018.

Some of the new requirements that need to be met are:

-   A minimum of SEK 500 million in investments in each fund from investors outside of the Premium Pension Platform

-   A minimum of 3 years of relevant and representative track record for each fund
-   A minimum of 3 years of relevant fund management activity by the fund- and investment manager
-   New minimum requirement for Sustainability in the management of the funds
-   Acceptance of new “Code of Conduct”, assessing suitability for the Premium Pension Platform
-   Ongoing monitoring and reporting

Another change is that there will be one Fund Agreement for each fund, unlike today's cooperation agreements, which may include several funds.

As of July 1^st, 2018, it is forbidden to market or sell services and products in the premium pension over telephone.

Application

Last day for application for a seamless transition from the current agreement to new Fund Agreement is December 28^th, 2018, at 16:30 CET.

Funds that have not submitted an application by the last application date will be deregistered. A fund, whose application has been rejected, will be deregistered. The fund will be able to apply again.

Questions and answers about the new requirements

When does the termination of the old cooperation agreement take place?

The notice of termination was sent out in June, 2018. The existing Cooperation Agreement is valid until further notice. If the application to enter into a fund agreement is approved, the existing Cooperation Agreement will be replaced by a new Fund Agreement. If the application is rejected, or if the fund manager has not submitted an application, the fund will be deregistered.

When can you apply for a fund agreement and when is the final application date?

A fund manager can submit an application, using the Pension Agency’s application form, from November 1^st, 2018. Last day for application for a seamless transition from current agreement to a new Fund Agreement is December 28^th, 2018, at 16:30 CET.

How will the application process take place?

The application process complies with Swedish administrative law. If the Pensions Agency approves the application, a Fund Agreement with the fund will be concluded. There will be one Fund Agreement for each fund.

What new terms will be included in the Fund Agreement?

The new terms of the Fund Agreement:

·  minimum managed capital outside the Premium Pension Fund Platform
·  minimum of relevant and representative track record for each fund
·  minimum of relevant fund management activity by the fund- and investment manager
· New minimum requirement for Sustainability in the management of the funds
· The maximum number of funds per manager is 25 funds

How will the Pensions Agency act if a fund at one point in time does not meet the requirement of SEK 500 million in managed capital outside the premium pension scheme?

If the fund, at any point in time, does not meet the requirement it’s a breach of contract. The fund manager should then inform the Swedish Pension Agency without delay. Given that it constitutes a material breach of contract, the fund agreement will be terminated. Other actions will only be taken if the Pension Agency assess that they are clearly in the best interest of the pension savers.

What about mergers of funds?

A merger of funds need to have been decided and approved upon by a financial supervisory authority for the application to be treated as a merged fund. However, the merger does not need to have been implemented by the time of application. The application can only be approved once the merger is completed. In case of a merger, it is important to indicate in the application, for all funds involved, if a fund is subject to a merger.

What are the new sustainability requirements?

The requirement on sustainability in fund management is designed as a minimum level of requirement. The Pensions Agency will regulate it in the Fund Agreement and it will cover all funds in the Premium Pension Platform. UN PRI will be the minimum requirement for sustainability. The requirement for sustainability information will follow the guidelines of the Swedish Investment Fund Association, see English translation below.

What requirements are there for minimum fund management activity by the fund- and investment manager?

A fund manager shall, when applying for the new Fund Agreement, show that it has managed one or more funds for a continuous period of three years before entering into the agreement. The fund manager must have been authorized to conduct fund operations by the relevant regulatory authority throughout this period.

Acceptance of new “Code of Conduct”, assessing suitability for the Premium Pension Fund Platform, what does that mean?

The Pensions Agency will review the suitability of the fund manager, its representatives and its affiliates, such as, but not limited to: personal conduct and reputation, ability to put pensioners' interests first, and not cause damage to the confidence for the Premium Pension System.

Good practice within the Premium Pension Fund Platform is, for example, that the fund does not use:

·  inappropriate business practices or hidden fees
·  misleading marketing or sales through other products
·  inappropriate investments (considering complexity etc.)

Good practices also includes responsibility for closely related business partners.

What fees will the Pensions Authority impose?

The pension authority shall, by law, charge each fund a fee for:

·  application processing – SEK 75 000 for the first application for a fund agreement of a fund manager, and SEK 10 000 for subsequent fund agreement applications of a fund manager
·  ongoing review and follow-up – SEK 32 000 per year for each fund agreement 

What happens to existing fund management companies with more than 25 funds?

Existing exemptions will be terminated and the Pensions Agency will only allow 25 funds per Fund Company.

What minimum requirements will you have regarding sustainability work in the fund management?

A fund manager must have signed the UN-supported Principles for Responsible Investments (PRI), or be subject to the signing of PRI principles made by the fund manager's Group. The requirements for sustainability apply both during the contract signing period and during the contract period.

· If the fund manager delegates the management to an external asset manager, the fund manager shall ensure that the external asset manager has signed the PRI principles.
· If the fund invests in other funds, the fund managers of these funds must also have signed the PRI principles.
· When merging into another fund, the receiving fund must also have signed the PRI.

However, this should not be interpreted as a prior notice. Further guidelines are under development.

What requirements will you make regarding relevant and representative track record for each fund?

Swedish law stated that each fund shall have at least three years of coherent return history by the time of the application and throughout the term of the agreement.

In order to fulfil good practice in the premium pension area, the Pension Agency’s current assessment is that the return history should also be relevant and representative of the investment strategy the fund intends to have during the agreement period. This means that the Pensions Agency will likely not allow any significant changes to the Fund's investment philosophy, investment orientation or general strategy at the time of application or during the term of the agreement.

However, this should not be interpreted as an advance ruling. Further guidelines are under development.

What happens to the capital of an existing fund on the Premium Pension Fund Platform if the fund company does not choose to apply for a Fund Agreement?

The capital of an existing fund on the fund market will be transferred to AP7 Såfa if the fund company does not choose to apply for the new fund agreement before 16:30 CET, on December 28^th, 2018.

Who can apply for a fund agreement?

The Swedish Pension Agency will enter into fund agreement with fund managers. A fund manager, according to Chapter 64, § 3 second paragraph 1 of the Social Insurance Code, is a collective investment undertaking, UCITS fund provider or management company entitled to conduct fund operations in accordance with Chapter 1, § 1, of the Swedish UCITS Act (2004:46). Fund managers can be Swedish as well as foreign fund managers. The fund manager may delegate investment management (to an “external investment manager”) or fund distribution as long as the fund manager comply with the fund agreement’s definition of “fund manager”. 

Regarding the application, may fund managers submit their document regarding conflicts of interest in English?

Yes, given that all questions in the application form regarding conflict of interest are answered in Swedish.

Does all applications for the fund manager’s funds have be submitted at the same time?

No, you apply for one fund agreement per fund and hence, may choose to submit the individual applications at different times. However, if the fund manager wishes to submit applications for more than one fund at the same time, please follow the instructions given in the application form.

What requirements are there for minimum fund management activity by the fund- and investment manager?

A fund manager shall, when applying for the new Fund Agreement, show that it has managed one or more funds for a continuous period of three years before entering into the agreement. The fund manager must have been authorized to conduct fund operations by the relevant regulatory authority throughout this period. 

External investment management may only be conducted by an external investment manager with authorisation to administer securities funds or conduct discretionary portfolio management with regard to financial instruments and who has managed capital for at least three years.

The fund manager already has access to Secure-ID token. Does the fund manager need to apply for new Secure-ID token? 

No, if all information previously submitted is still valid, please state in the application form thay you already have a token and kindly confirm all information is still valid. 

Who does the "Document stating which representatives that may represent the Fund Manager in trading" refer to, especially when the fund manager has outsourced fund trading?

It refers to the representatives that may represent the fund manager in trading, does not have to be within the fund manager's organisation. Will to some extent be the same representatives that apply for Secure-ID token.

Do the appendices constitute contractual content and thus, should be submitted with the application to enter into a fund agreement?

Yes, appendices A, B and C constitute contractual content according to 2.1 and should be submitted, initialled on each page, when applying for a new fund agreement.

Address information

Pensionsmyndigheten, Att: Fondtorgsavdelningen, Box 38190, 100 64 Stockholm

Visit us: Hornsgatan 168, Stockholm

E-mail: registrator@pensionsmyndigheten.se

For sending post by Express Service to Fund Unit please use this address: Pensionsmyndigheten, Hornsgatan 168, 117 28 Stockholm, Sweden

Fund department

Director of department: Erik Fransson 
Telephone number: +46 10 454 29 14
E-mail: erik.fransson@pensionsmyndigheten.se

Fund selection and compliance unit

Head of unit: Christian Lundström
E-mail: christian.lundstrom@pensionsmyndigheten.se

Queries regarding co-operation agreements, enrolment of funds and legal issues:
fundselection@pensionsmyndigheten.se

Fund information unit

Head of unit: Estrella Zarate
E-mail: estrella.zarate@pensionsmyndighete

Fund administration

Head of unit: Rasmus Bjälkeson
E-mail: rasmus.bjalkeson@pensionsmyndigheten.se

Queries about daily trading, Focus, contract notes, NAV reporting, payments etc:

fundadmin@pensionsmyndigheten.se

fundinvoice@pensionsmyndigheten.se

Fax: +46 8 658 13 30