Joint release of the Financial Supervision Authority, Swedbank and Swedbank Investeerimisfondid
At the meeting between the representatives of the Financial Supervision Authority, Swedbank AS and Swedbank Investeerimisfondid AS held on Wednesday, 14 October, Swedbank provided sufficient explanations as to the supervisory proceeding initiated over their activity.
The parties reached the following conclusions:
- In their activity, the management companies are required to especially consider the protection of the interests and rights of the unit holders.
- In managing funds, each and every fund management company must do everything in their power to detect and prevent potential conflicts of interests, for which purpose they must have relevant internal rules and regulations in place.
- The conclusions of the proceedings brought by the Financial Supervision Authority indicate that the internal rules employed by the investment funds to prevent conflicts of interest were not sufficiently clear or detailed. The said internal rules concern the investments made by the funds managed by the management company Swedbank Investeerimisfondid into other funds managed by the same company.
- The Financial Supervision Authority accepted the explanations provided by Swedbank Investeerimisfondid and is confident that Swedbank is capable of strengthening their internal rules. The Authority is satisfied with the future action plan of the funds.
- The Financial Supervision Authority wishes to stress that there have been no conflicts of interest between Swedbank and the pension fund clients of Swedbank.
Swedbank Investeerimisfondid treats the pension assets entrusted to it with a full sense of responsibility. Having regard to the significant role played by Swedbank Investeerimisfondid within the Estonian financial sector, whereas feeling great responsibility towards the clients who have entrusted their money to the funds and wishing to maintain trust in the pension system as a whole, the parties agreed as follows:
- Swedbank shall, in order to restore public trust, compensate to the clients of the pension funds the difference caused by the decrease of the net value of the units of the Private Debt Fund (PDF) in the third quarter of this year.
- For the purpose of equal treatment of all PDF investors, the net value of a unit as at the end of the second quarter shall be compensated also to the other investors of that fund. This option shall be made available to all persons who are currently or were the investors of the fund as of 1 July 2009. This principle shall not be applied to those who decide to remain as investors as at the end of the fourth quarter. Additional information will be given to the investors in this regard.
- Swedbank Investeerimisfondid shall improve their internal rules to rectify the deficiencies cited in the report of the Financial Supervision Authority so that in the future any instances of a conflict of interest would be prevented.
The Financial Supervision Authority, Swedbank and Swedbank Investeerimisfondid shall continue their efforts to keep the investment environment in Estonia transparent and supportive of effective investment decisions.
Head of Communications
Financial Supervision Authority
+372 668 0546
+372 510 8561