The Swedish Fund Selection Agency (Fondtorgsnämnden, FTN) may be facing the first official appeal by a fund manager losing business because of a procurement decision, after Indecap Fonder told local media it would launch a challenge.
Asked to comment on the reports, an FTN spokesman confirmed one tenderer had stated in the media that it was dissatisfied with the outcome of its latest procurement – for actively managed global equity funds – and intended to request a judicial review.
He told IPE: “No application has yet been submitted to the administrative court, so we are waiting to see whether they file such an application and, if so, on what legal grounds”.
According to Danish news service AMWatch, Stockholm-based Indecap Fonder’s Indecap Guide 2 fund is the second most popular fund in its category currently on the premium pension funds platform in terms of assets under management.
Indecap Fonder has not yet responded to IPE’s requests for comment.
The firm lost out in the FTN’s award of mandates for 14 funds from 12 managers in its biggest procurement yet for the reformed premium pension funds platform, announced 24 February.
Indecap Fonder had submitted tenders in the actively managed global equity funds category, for two of its funds – Indecap Guide 2, the fund already offered on the existing funds platform, which is being phased out, and the fund Indecap Guide Global.
Erik Fransson, FTN executive director, said: “When individual actors are dissatisfied with the outcome and it is a large share of their AUM at stake, it is natural that they use the legal remedies available to them.”
In that situation, he said, it was his agency’s responsibility is to provide the court with a complete basis for a legally secure review and to ensure that the funds that had been awarded could be made available to savers as soon as possible.
Were an application now submitted, it would be the first time that a losing bidder requested a judicial review of one of FTN’s award decisions, the agency said.
Not yet knowing the legal grounds the tenderer might choose to request a judicial review, the FTN said it was hard to comment on the case.
“What we can say is that all bids have been evaluated according to the same model and criteria, based on the legislation decided by the Swedish Parliament,” the spokesman said, adding that if an application were filed, it would be up to the court to assess whether the FTN had applied that legislation correctly.
For a reform of this size, he said, it was expected that the model would be tested in court at some point, adding that that was an important part of a rule‑of‑law process.
“If a judicial review is carried out, we expect it to confirm that FTN has a robust and transparent procurement process that follows the law, and that guidance will be positive going forward for both us and the market,” he said.
However, Fransson noted: “From the savers’ perspective, the unfortunate aspect of a potential judicial review is the delay it creates.”
Introducing the procured funds would be postponed for as long as a review went on, he said.
“These funds, on average, have significantly lower fees and high quality compared to today’s offering, so savers will have to wait longer before they can benefit from those improvements,” he added.
