Definition

Sovereign wealth fund (Ro: “fondul suveran de investitii”, Fr.: “le fond souverain d'investissement”, Gr.: κρατικά επενδυτικά ταμεία)  = a state-owned investment fund which consists of money derived from a country's reserves, set aside for investment purposes to benefit the country's economy and citizens. A sovereign wealth fund commonly consists of central bank reserves that accumulate as a result of budget and trade surpluses, and of revenue generated from the exports of natural resources. They may have been created through commodity exports, either taxed or owned by the government, or have their origin in non-commodities: usually created through transfers of assets from official foreign exchange reserves.

The legal basis for such a fund differs from country to country, varying from constitutional to fiscal or company law. The traditional classification of sovereign wealth funds includes: the stabilisation funds, the savings or future generations funds, the pension reserve funds, the reserve investment funds and the strategic development sovereign wealth funds (SDSWF).Generally, SWF do not engage directly in macroeconomic policies, except in three cases: the transfers to the budget for exceptional and targeted needs; the drawdown of funds for transfer to the central bank in case of exceptional balance of payments or monetary policy needs; the domestic stabilisation for businesses or corporations vital to the economy.

Generally, SWF do not engage directly in macroeconomic policies, except in three cases: the transfers to the budget for exceptional and targeted needs; the drawdown of funds for transfer to the central bank in case of exceptional balance of payments or monetary policy needs; the domestic stabilisation for businesses or corporations vital to the economy.

Useful links

Legislation

http://www.ifswf.org/sites/default/files/santiagoprinciples_0_0.pdf– Sovereign Wealth Funds Generally Accepted Principles and Practices: “Santiago Principles”, October 2008 [English]

https://www.ssa.gov/OP_Home/ssact/title02/0201.htm- 42 U.S. Code § 401 [English]

Organisations and associations

http://www.swfiinc.com/  - The Sovereign Wealth Fund Institute

http://www.fondssouverains.com/- Toute l'actualité sur les Fonds Souverains [French]

http://www.ifswf.org/- International Forum of Sovereign Wealth Funds

Online publications

https://www.lepetitjuriste.fr/wp-content/uploads/2011/11/CIRDI%20et%20fonds%20souverain.pdf– L. Bibaunt, 200/2010, “Singularités de l'arbitrage CIRDI face à l'arbitrage conventionnel: Souveraineté des Etats et fonds souverains d'investissement”, Mémoire de recherché, Universite Paul Cezanne [French]

http://www.persee.fr/doc/ecofi_0987-3368_2009_hos_9_1_5446– R. J. Gilson, C. J. Milhaupt, 2009, “Fonds souverains et gouvernance d’entreprise : une réponse minimaliste au nouveau mercantilismeRevue d'économie financière  9:1 373  [French]

http://www.ifswf.org/sites/default/files/SantiagoP15CaseStudies1_0.pdf  - International Forum of Sovereign Wealth Funds, 2014, Santiago principles: 15 case studies [English]

http://ec.europa.eu/economy_finance/publications/pages/publication15064_en.pdf– S. Mezzacapo, 2009, “The so-called "Sovereign Wealth Funds": regulatory issues, financial stability and prudential supervision”, European Economy, Economic papers 378 [English]

https://www.oecd.org/fr/developpement/pdm/40865791.pdf- H. Reisen, 2008, “Fonds souverains et économie du développement”, La Vie economique 7/8-2008  [French]

https://corpgov.law.harvard.edu/2014/08/07/the-corporate-governance-of-sovereign-wealth-funds/- M. C. Ungureanu, 2014, “The corporate governance of sovereign wealth funds”, Harvard Law School Forum on Corporate Governance and Financial Regulation [English]

Publications

R. Bismuth, 2010, “Les fonds souverains face au droit international. Panorama des
problèmes juridiques poses par des investisseurs peu ordinaires”, AFDI [French]

S. Ghahramani, 2013, “Sovereign Wealth Funds, Transnational Law, and the New Paradigms of International Financial Relations”, Yale Journal of International Affairs, Vol.8, No.2, pp.52-64 [English]

By Madalina Enea