Currently, the regulator’s proposal is at the hearing stage. This round of consultation will end on 30 October 2006. The Norwegian pensions industry expects the ministry to report on the findings by the end of 2006.

Caspar Holter, partner at Oslo based Pensjon & Finans consulting, told nrpn that the ministry and Kredittilsynet have somewhat differing views on pension investment regulations.

“Kredittilsynet has proposed the introduction of the so-called prudent person principle. This means that the upper limit of 35 per cent for all assets in equity investments would be abolished. The intention is also to increase the limit of hedge fund investments up to 10 per cent of all assets, but so that a maximum of 1 per cent could be invested in each hedge fund. All other limits except for hedge funds would be abolished,” Mr Holter explains.

“But the outcome of the proposal is still somewhat uncertain. The ministry is not sure if the prudent person principle is the correct route to take. They want quantitative regulation and to make sure that end investors get what they have paid for,” says Mr Holter.

In late 2006, Kredittilsynet also proposed introducing a Swedish style traffic light system to supervise pension investments in Norway.

“The rationale behind the prudent person principle proposal is that it would work together with a future traffic light system. On one hand, pension institutions would have a more liberal environment to work in, but on the other, they would be efficiently monitored by the supervisory authority,” adds Mr Holter.

RC

Printer friendly version

Email this article to a friend