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Laid down by the Ministry of Finance in pursuance of section 15 of Act No. 44 of 29 June 2007 relating to Folketrygdfondet. Section 1. Management of the Government Pension Fund Norway
Folketrygdfondet shall manage the Government Pension Fund Norway (hereinafter referred to as the «Pension Fund») on behalf of the Ministry of Finance. Section 2. Investment of the Pension Fund The Pension Fund is a capital contribution to Folketrygdfondet. Folketrygdfondet shall reinvest, in its own name, this capital in financial instruments and cash deposits. The Executive Board of Folketrygdfondet is responsible for ensuring that the Pension Fund’s capital is invested with a view to achieving the best possible return over time in Norwegian kroner within the framework of laws, regulations, and supplementary guidelines governing the management. Section 3. Accounting return
The value of the Pension Fund shall be equivalent to the value of the portfolio of financial instruments and cash deposits. The book return on the portfolio, with the deduction of payments to Folketrygdfondet, is added to the capital as of 31 December each year. Section 4. Investment universe
The Pension Fund shall be invested in an equity and fixed income portfolio according to the following distribution:
Equity instruments 50-70 pct.
Interest-bearing instruments 30-50 pct. Equity instruments include shares, primary capital certificates, convertible bonds, and bonds with warrants for shares listed on a regulated market place. In the management of the equity and fixed income portfolio, financial instruments may be used, including derivatives. Folketrygdfondet may enter into sale and repurchase agreements relating to equity instruments and interest-bearing instruments whereby the purchaser of the instruments is obliged under the agreement to return these to the seller. The portfolio of equity instruments shall be invested in equity instruments listed on a regulated market place in accordance with the following distribution:
Norway 80-90 pct.
Denmark, Finland, and Sweden 10-20 pct. The fixed income portfolio shall be invested in interest-bearing instruments whose issuers are domiciled in Denmark, Finland, Sweden, and Norway, or have listed equity on regulated market places in these countries, according to the following distribution:
Norway 80-90 pct.
Denmark, Finland, and Sweden 10-20 pct. Up to 2.5 pct. of the Pension Fund capital may be invested in Norwegian shares that have not been listed on a regulated market place if the company has applied for or has specifically planned to apply for a listing on such a market place. Folketrygdfondet may retain shares in Norwegian companies that change their status to become foreign companies in connection with acquisitions, mergers etc. The Ministry of Finance may decide to exclude companies from the investment universe of Folketrygdfondet. Section 5. Benchmark portfolio and tracking error
The Ministry of Finance determines a benchmark portfolio for the Pension Fund. The expected discrepancy between the return on the actual portfolio and that on the benchmark portfolio, measured by expected tracking error on an annualized basis must not exceed 3 percentage points. Foreign currency positions shall not be taken in the active management of the Pension Fund. Section 6. Share ownership
Folketrygdfondet may hold up to 15 per cent of the share capital or the primary capital of one single company in Norway. Folketrygdfondet may hold up to 5 per cent of the share capital or the primary capital in one single company in Denmark, Finland, and Sweden. A company’s ownership of its own shares shall not be taken into account under this provision. Section 7. Risk management
The Executive Board shall ensure that adequate risk management and control routines are adopted in the management of the Pension Fund. Section 8. Exercise of ownership rights and ethics
The primary objective of Folketrygdfondet’s exercise of ownership rights is to safeguard the Pension Fund’s financial interests. Folketrygdfondet shall have Ethical Guidelines for the management of the Pension Fund. Section 9. Annual and semi-annual reports
Folketrygdfondet shall prepare annual and semi-annuals reports on the management of the Pension Fund. Section 10. Supplementary provisions
The Ministry of Finance may prescribe more detailed provisions in order to supplement and implement the rules. In special cases, the Ministry of Finance may deviate from sections 4 – 6. Section 11. Effective date
The Regulations enter into effect on 1 January 2008, repealing, from the same date, Regulations No. 1419 of 15 December 2006 relating to the Management of the Government Pension Fund Norway.
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