OECD relaxed on sovereign funds

OECD boss Angel Gurrìa says funds should meet certain criteria

New laws or regulations to govern state-controlled funds are not needed so long as they are motivated by profit, not politics, the OECD says.

The OECD, which groups 30 of the world's richest economies, has found no cases where sovereign wealth funds have acted to further political goals.

OECD boss Angel Gurria said these funds should not be unduly restricted.

US and EU politicians have called for the funds from Asia and the Middle East to be more transparent.

Concern

These funds have taken stakes in Western banks and other businesses recently and concern has arisen that their motives are not just commercial.

TOP SOVEREIGN WEALTH FUNDS United Arab Emirates Norway Singapore Kuwait China Source: Standard Chartered

"There should not be any regulation or code applied that unduly restricts the freedom of investment, because we would be doing ourselves a disservice," Mr Gurria said in Beijing.

In December, China's $200bn investment fund agreed to invest $5bn in Morgan Stanley and its latest investment is a $100m stake in Visa that went public last week, according to a report from Chinese financial magazine Caijing.

Mr Gurria said that the funds should not be subject to restrictions provided they meet certain criteria:

• They are motivated by the pursuit of profit
• They are professionally led and managed
• They regularly divulge results and information in keeping with other financial institutions

G7 finance ministers had asked the OECD and the International Monetary Fund to examine best practises for these funds in October last year.