IMF Survey: Sovereign Funds Set Up Permanent Representative Forum

IMF News, May 6, 2009

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Sovereign wealth funds (SWFs) established a standing global forum to discuss issues central to sovereign funds and the broader international financial community.
The Forum will keep under review issues relating to the Santiago Principles, designed to ensure an open international investment environment.
Article author and affiliation: By Jukka Pihlman, IMF Monetary and Capital Markets Department.
Publication date: May 6, 2009.

The International Working Group of Sovereign Wealth Funds (IWG) representing 23 countries with sovereign wealth funds held its fourth meeting in Kuwait City on April 5–6, 2009.
The Forum will initially comprise IWG members but membership is open to SWFs that meet the Santiago Principles definition of an SWF and endorse the Principles.
IWG member countries:
- Australia, Azerbaijan, Bahrain, Botswana, Canada, Chile, China, Equatorial Guinea, Iran, Ireland, South Korea, Kuwait, Libya, Mexico, New Zealand, Norway, Qatar, Russia, Singapore, Timor-Leste, Trinidad and Tobago, United Arab Emirates, United States

The Forum intends to:
- Meet at least once a year to exchange views on issues of common interest.
- Promote understanding of the Santiago Principles and SWFs’ activities.
- Keep under review issues relating to the Santiago Principles.
The Forum will contribute to the development and maintenance of an open and stable investment environment, and facilitate communication among SWFs and with recipient country officials, representatives of multilateral organizations, and the private sector.
Areas for member exchange include:
- SWF activities
- Risk management
- Investment regimes
- Market and institutional conditions affecting investment operations
- Interactions with the economic and financial stability framework

The Kuwait Declaration, issued at the end of the April 5–6, 2009 meeting hosted by the Kuwait Investment Authority and the State of Kuwait, set up the Forum and promised to maintain an agenda of SWF issues.
Elected leadership:
- Chair: David Murray, Chairman of Australia’s Future Fund Board of Guardians
- Deputy Chairs: Jin Liqun, China Investment Corporation Board of Supervisors Chairman; Bader Mohammad Al-Sa’ad, Kuwait Investment Authority Managing Director
The Forum will have a professional secretariat.
The Forum asked IMF staff to initially undertake the role of Forum secretariat, recognizing IMF staff’s contribution to the work of the IWG and its experience in multilateral work.

The Santiago Principles were agreed in 2008.
The inaugural meeting of the Forum will be held in Baku, Azerbaijan in October 2009.
The Forum is a voluntary group and intends to meet at least once a year.

SWFs are defined as special purpose investment funds or arrangements, owned by the general government.
Created by the general government for macroeconomic purposes, SWFs hold, manage, or administer assets to achieve financial objectives, and employ a set of investment strategies that include investing in foreign financial assets.
Exclusions from the SWF definition include:
- Foreign currency reserve assets held by monetary authorities for the traditional balance of payments or monetary policy purposes
- State-owned enterprises in the traditional sense
- Government-employee pension funds
- Assets managed for the benefit of individuals

Source: IMF Survey: Sovereign Funds Set Up Permanent Representative Forum, May 6, 2009.