IDEAL FUND

There is an inherent need to clearly define the roles and responsibilities of the players in the current governance model.Within this context, governance principles and mechanisms should be established around the following core principles: 1. The promoter of retirement vehicles should assume an institutional responsibility beyond that of “brand protection” which exists today. This institutional responsibility should be targeted at meeting the objectives agreed with the investor as well as conducting business “properly” and pro-actively managing inherent conflicts. 2. Legally defined responsible entities such as the depositary, the auditor, or external specialists such as independent directors should be charged with additional oversight and reporting in case inherent conflicts are not handled by the promoter. 3. Any such oversight and reporting should be developed and consistently applied at the EU level and not left to the individual member state’s discretion. The framework should also apply to all long-term savings products in order to allow for a level playing field. 4. An “investor representative” registered with the State and empowered with specific additional scope for protecting investors’ interests should also be considered for retirement vehicles. This representative would thus also manage the States’ “systemic” interests in the funds operations.

Care should also be taken that such oversight does not dilute the “ownership” of the product by the promoter as has been argued to be the case within the full-blown independent board model seen in the U.S.An effective governance framework is one which clearly defines the role of various parties having an eye on the one-hand to ultimate “ownership” of the product and its delivery on the objectives and on the other to ensuring conflicts are properly managed and business is conducted properly. Care should also be taken that such oversight does not dilute the “ownership” of the product by the promoter as has been argued to be the case within the full-blown independent board model seen in the U.S. An effective governance framework is one which clearly defines the role of various parties having an eye on the one-hand to ultimate “ownership” of the product and its delivery on the objectives and on the other to ensuring conflicts are properly managed and business is conducted properly.