FRANCE - The French Pension Reserve Fund has now completed the first phase of its 16 billion-euro tender process - with 137 of the 410 applications going through to the second phase.

And it signalled that it would be vigilant about the probe into improper trading practices in the US.

"The first phase of the selection for applicants following the call-for-tenders relating to the attribution of 27 management mandates launched by the Fonds de Réserve pour les Retraites is now closed," the FRR said.

The FRR has sent draft management agreements to the managers as well as questionnaires to enable it assess the offers’ quality. The deadline for applications is February 2.

“The FRR has been delighted by the interest shown to its call for tenders by asset managers across all of the major markets to and by the quality of the applications it has received for all of the lots,” the FRR added.

It added that it would “continue to pay close attention to any conclusions drawn by the regulatory authorities as a result of the inquiries they have initiated following the uncovering of certain practices within the US mutual fund industry”.

The FRR had originally planned to inform the managers that made it through the first stage by the end of November. It was awaiting a decree by the French government regarding durations of mandate contracts in France.

That degree has now been published – meaning that some mandates will be longer than the three years that was originally stated.

All except four of the mandates will now be for four years. The large-cap euro zone and US passive equities mandates will be for three years. The small/mid-cap euro zone and US active equities briefs will last five years.

The FRR tendered 27 asset management mandates together with 12 stand-by mandates for the 16 billion euro fund in July this year. The application period closed on September 12.

There are twelve different asset classes in total. The final selection of fund managers is expected to be announced in the first quarter of 2004.