By having access to information about risk and fee numbers, investors can make informed decisions when investing money with fund and asset management firms. Unfortunately firms are not compelled to disclose such information to their investors.
In force today, fund and asset management firms are only obliged by law (FFFS 2013:9) to present an overview of each fund's asset and liabilities, total wealth and asset value. However, in a new amendment proposal to the aforementioned law, the Swedish financial supervisory authority, Finansinspektionen (FI), proposes extensions to widen the present reporting requirements.
The proposed additional requirements includes; information about the fees charged by each fund, their total gearing-level as well as the standard deviation and liquidity of the funds' allocations. Furthermore, if a Value-at-Risk (VaR) based model is used to calculate total risk exposure, VaR of each fund should also be provided.
In addition to an improved consumer landscape with further transparency of risk and fee structures towards investors, the proposed extensions will allow for a more efficient analysis of the fund market and to monitor that the funds' risk profiles are regulatory compliant.