Sweden’s investment funds lobby has come out with numerous criticisms of draft procurement documents published last month by the new agency in charge of populating the reformed €100bn premium pension fund platform.

In its 17-page response to the Swedish Fund Selection Agency’s (Fondtorgsnämnden, FTN) consultation on draft material for the upcoming procurement of funds for new iteration of the platform, the Swedish Investment Fund Association (Fondbolagens förening) listed many changes that it said needed to be made before the tendering procedure was finalised.

Fredrik Nordström, chief executive officer of the association, said special procurement legislation had been drawn up specifically for Sweden’s premium pension, ensuring that the basic principles of EU law on equal treatment, transparency and proportionality were adhered to.

“It is therefore important that the requirements in the procurement do not unnecessarily discriminate against fund companies that can meet the target for the premium pension,” he said.

The FTN was created as part of a reform of the first-pillar premium pension system of individual defined contribution (DC) accounts, which forms one element of the Swedish state pension alongside the larger pay-as-you-go income pension.

The agency has been tasked with forming a procured platform for the private-sector funds that savers will be able to select, replacing the original funds’ marketplace, which included all comers meeting certain criteria but was hit by fraud and mis-selling scandals.

Nordström said mandatory requirements and questions should only be asked of tenderers if both relevant and necessary for the evaluation of the funds.

“An unnecessarily burdensome procurement basis inhibits competition among tenderers and, in the long run, risks reducing premium pension savers’ freedom of choice,” he said last Friday alongside publication of the association’s consultation response.

Nordström said the FTN, with its tight schedule, had probably started drawing up its procurement documents from papers already used in the private market.

“And we can state that there is still a lot of work to be done to adjust these to the new procurement regulations,” Nordström said.

According to the industry association, a problem with basing procedures on private procurements was that the latter were not covered by public procurement requirements and principles.

“However, according to law, the procurement of funds for the premium pension’s fund market must be carried out in accordance with the basic EU legal principles of, among other things, equal treatment, openness and proportionality,” the association said.

The principle of equal treatment was not being upheld in the special oral procedure described by the FTN, it said, in which where certain tenderers were allowed to adjust their tenders.

Also, the Swedish Investment Funds Association said various questions for tenderers were incomprehensible, so there was a risk of differing interpretations.

“In addition, a lack of transparency in terms of scoring and weighting has a competitive effect when tenderers cannot predict whether it is worth submitting a tender,” it said.

Among its many criticisms, the association said a “serious objection” was that the basis of the documentation seemed designed for asset management services, rather than for units in investment funds.

“A decisive difference in relation to asset management services, is that funds are subject to extensive consumer protection regulations which entail obligations other than those applicable to asset management,” the lobby group said.

The FTN said on its website yesterday that it had started the work of analysing the views received from fund companies and their advisers, interest organisations and academia. It has previously said it expects to launch its first tenders this spring.

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