SWEDEN - Sweden's PPM system looks set to be restructured on the lines of the Danish ATP's ‘Folkboersen' or ‘People's Stock Exchange'.
Karl-Olof Hammarkvist, a professor at the Stockholm School of Economics, who is reviewing the system as part of an overhaul initiated by the government, said: “We are looking at adopting [a model] in this direction. We think it’s a clever way of helping people make decisions.
“The ATP SP model is made for the Danish market but it helps people think about risk, asset allocation, choice between various funds and fund managers in a structured way. We are looking at developing this in the Swedish context.”
From January 1, 2005, savers of ATP’s SP system have the option of moving their funds into a new unit linked scheme which works as an internet platform where UCITS providers can place their funds. Savers have the benefit of a crown rating system when choosing their funds and are also provided with information on costs. Customers can take individually tailored decisions based on their risk appetite and can also compare their returns against ATP’s benchmark returns.
Hammarkvist said that the Swedish system - like the Folkboersen - is likely to be established through an internet-based platform. “The only way of handling things is to try to get people as quickly as you can on the internet. It will be really expensive to handle it by paper,” he said.
Currently the Folkboersen has around 225 registered funds, while the PPM has around 670 funds. Hammarkvist said that he would recommend cutting the number of funds in the system but refused to drawn on how much the funds would be reduced to.
Unlike the PPM, the Danish system also charges an entrance fee for managers to register for the new system. Hammarkvist said that he was analysing this system to see what the implications of a similar move would be for the Swedish system.
Last year, the Swedish government established an inquiry into the PPM system to review if costs in the system were reasonable and whether the number of funds is too high.
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