At least 240 funds will disappear from the Swedish Pensions Agency’s fund market this year following stricter requirements for companies looking to keep their funds within the premium pension space.

According to Swedish news agency TT, funds looking to operate in the premium pension system had to file new applications by 28 December 2018. At that point, the authority had received applications from about 70 companies with about 570 funds.

Swedish Pensions Agency director fund department Erik Fransson told the agency: “This means that around 240 funds will be deregistered sometime during the first half of the year.”

In addition, this number might rise as there might be funds among those who have applied that do not meet the new requirements.

In order to be part of the premium pension market, fund managers must, among other things, have at least three years’ history and at least SEK 500m (€49m) in capital outside of the premium pensions.

According to TT, many funds are disappearing from the space based on these quantitative requirements.

The government estimates that about one million of the approximately seven million savers will be affected by the change. The money from the moved funds will be placed in the state-run AP7 Såfa, the default fund option.

The change comes after scandals that has affected savers, such as rogue and fraudulent funds. The Swedish Pensions Agency hopes the new regulations will shut out funds that want to abuse the system.

“This is done to increase the quality of the fund space, so that we will not see more irregularities than before,” Fransson told TT.

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