Indecap is appealing an Administrative Court ruling on the Swedish Fund Selection Agency’s (FTN) procurement of actively managed global equity funds, arguing that key legal and procedural questions require further judicial review.
The Administrative Court in Stockholm rejected Indecap’s application in full on 14 October, ruling that FTN had conducted the procurement correctly.
The tender covers approximately SEK 200bn in assets within Sweden’s premium pension system. Indecap challenged the process in March after its Indecap Guide 2 C fund failed to secure a contract.
Following a legal review, Indecap said it had identified aspects of the ruling and procurement that warranted further examination. It is seeking leave to appeal to the Administrative Court of Appeal.
The appeal centres on two fundamental legal questions, according to Indecap: which procurement regulations should apply to fund agreements, and the extent to which suppliers must raise objections to errors during a procurement process.
The company also argues that the court did not fully examine its objections concerning mandatory requirements, evaluation procedures and documentation.
Indecap chief executive officer Mats Lagerqvist said: “Our assessment is that there are fundamental legal questions and procedural shortcomings that require further judicial review. This concerns both how the rules should be applied and the conditions necessary to ensure a transparent and legally sound evaluation process.”
He added that, as one of the first procurements under the new premium pension fund platform, the process required guidance from a higher court.
The legal challenge also reflects broader concerns raised by Indecap about the platform’s impact on competition and pension savers’ investment choices.
The company argues that the procurement has concentrated pension capital among fewer fund managers, affecting the diversity of investment options and the allocation of assets between Swedish and international managers.
FTN maintains that the procurement was conducted in accordance with applicable legislation.
FTN executive director Erik Fransson said the agency had a clear mandate to conduct procurements in line with the law and ensure pension savers had access to high-quality funds at competitive fees.
“The Administrative Court’s judgment confirms our assessment that the procurement has been conducted correctly,” he said.
FTN said it had not yet received an appeal and was therefore unaware of the grounds Indecap might invoke. The Administrative Court of Appeal will decide whether to grant leave to appeal, determining whether the case proceeds to further judicial review.
If leave is granted, the appeal court may also decide that FTN cannot enter into fund agreements with the successful tenderers while the case remains unresolved.
FTN said any such restriction would generally remain in place until the appeal court either refused leave to appeal or delivered a judgment.
Fransson warned that further legal proceedings could delay the launch of the procured funds.
“Unfortunately, we have no view on how long any continued review may take,” he said, adding: “What we can establish is that the process has already been ongoing for eight months and that each further delay means that pension savers will have to wait longer for the procured funds with lower fees and high quality.”
