Forum to oversee ethical behaviour of wealth funds

A permanent global forum has been set up to monitor a new voluntary code of conduct for sovereign wealth funds (SWFs).

The International Forum on Sovereign Wealth Funds, established at a meeting in Kuwait last month, will meet annually to discuss the Santiago Principles, a code of conduct agreed by the International Monetary Fund in October.  

Among the 24 principles is an exhortation on SWFs to ‘clearly define their ethical standards’ and make these known to their governing bodies, management, and staff. They are also urged to be more transparent by disclosing relevant financial information ‘so as to enhance trust’ in countries where they invest.

SWFs are state-controlled investment vehicles funded by foreign exchange revenues, typically from oil. There are more than 30, the biggest sponsored by China, Kuwait, Norway, Russia, Saudi Arabia, Singapore, and the United Arab Emirates.

So far 23 SWFs have signed up to the principles. The first meeting of the new forum will be in Baku, Azerbaijan, this October.