IMF and 25 wealth funds join hands to draft rules

Washington: The International Monetary Fund and 25 sovereign wealth funds on Thursday established an international working group to draft the first ever best practice guidelines for the state-owned funds, officials said.

"We had consensus on the approach forward," Hamad Al Suwaidi, director of the Abu Dhabi Investment Authority (Adia) and co-chair of the group, told a conference call after a two-day meeting in Washington.

He did not elaborate on which of the major funds attended the meeting. "We had very constructive discussions," said Al Suwaidi.

He said the group had formed smaller committees to work on the principles and get a draft done by an October deadline.

Jaime Caruana, counselor and director of the IMF's Monetary and Capital Markets Department, will also chair the group. "There is a variety of different wealth funds and at the same time in the meeting we had the sense it was necessary to agree on the way to move forward," Caruana added.

Aim

The guidelines in governance and transparency are aimed at helping ease concerns in many Western countries about the funds' growing size and influence.

The working group (IWG) said it would meet over the next few months to consider issues of wealth funds "that properly reflects their investment practices and objectives".

"The IWG will provide SWFs with opportunities to give and receive feedback and will strive to enhance good mutual understanding among its members and other parties," the statement added.