Time for a more harmonized Nordic fund market

The Nordic countries each have strong financial markets, but fragmentation and national solutions are holding back the region’s full potential. We are now calling for a joint Nordic agenda to simplify and harmonize regulations for fund management and distribution.

Today, market participants still face significant administrative and regulatory barriers when conducting cross-border fund activities, despite the existence of a common EU regulatory framework. Differences in national implementation, supervision, and reporting, all increase costs and often lead to capital and operations shifting to more harmonized markets such as Luxembourg and Ireland.

- A strong fund market is essential for competitiveness and growth. While the Nordic capital markets are well-developed, they remain too small and nationally fragmented. Differences in legal structures, marketing rules, and taxation continue to hinder cross-border fund distribution, says Jan Erik Saugestad, CEO of Storebrand Asset Management.

The Nordic region has the capital, expertise, and trust needed to become a leading area for savings and asset management in Europe.

-However, better coordination and simpler regulations are needed to get there. There is a risk that a large share of fund management could move to Luxembourg, which would mean that the Nordic market would risk losing important expertise. Without strong local knowledge, it will become more difficult to recruit the right managers, fund specialists, and to ensure long-term value creation and growth, he adds.

An integrated and harmonized Nordic fund market would reduce administrative burdens, create economies of scale, and give savers access to a broader and more competitive range of investment products. At the same time, the Nordic region would gain a stronger joint voice in the EU on issues such as transparency and reporting.

Storebrand is now calling on the Ministries of Finance and supervisory authorities in Sweden, Norway, Denmark, and Finland to jointly:

• harmonize the implementation of UCITS and AIF regulations,
• simplify fund registration and cross-border marketing,
• coordinate reporting and supervisory requirements, and
• establish a permanent Nordic collaboration to continuously remove barriers.

- It should become as easy to establish and distribute a fund across Nordic countries, as it is now within the rest of Europe. The potential is clear, what is needed now is the political will and leadership to make the region a truly harmonized market for savings and fund management.

- This would simplify cross-border fund distribution, but above all it would benefit our customers by giving them access to a broader and more competitive range of investment options. We should be focusing our time on delivering high-quality, value-creating products, not navigating cumbersome administrative processes, Saugestad concludes.

DEBATT: Dags för en harmoniserad nordisk fondmarknad (in Swedish)