GAPP Principle 1
The legal framework for the SWF should be sound and support its effective operation and the achievement of its stated objective(s).
- GAPP 1.1 Subprinciple The legal framework for the SWF should ensure the legal soundness of the SWF and its transactions.
- GAPP 1.2 Subprinciple The key features of the SWF’s legal basis and structure, as well as the legal relationship between the SWF and the other state bodies, should be publicly disclosed.
Status: Implemented
The Norwegian Parliament has established the legal framework for the GPFG in the Government Pension Fund Act. The Act frames the legal basis and governance structure of the Fund. The responsibility for managing the Fund is placed with the Ministry of Finance. The operational management of the GPFG is carried out by the Central Bank of Norway, Norges Bank. Norges Bank constitutes a separate legal entity according to the Norges Bank Act. The GPFG does not constitute a separate legal entity and does not have its own executive board or administrative staff but refers to a specific Norwegian krone deposit placed by the Ministry of Finance with Norges Bank.
The Government Pension Fund Act states that the investment objective shall be the highest possible return at an acceptable level of risk and that within the scope of this objective, the Funds shall be managed responsibly. The Ministry of Finance has pursuant to this Act laid down the mentioned objective and premise, and further regulations on the management of the Fund in a separate management mandate to Norges Bank. In the mandate the Ministry sets the general investment framework for the Fund and stipulates requirements regarding risk management, reporting and responsible management. Within the limits set by the Ministry, Norges Bank shall seek to generate the highest possible return, net of costs, measured in the currency basket of the investment portfolio.
Sources: GovernmentPension Fund Act, Norges Bank Act, GPFG mandate, Ministry of Finance’s website.