The Santiago Principles represent generally accepted principles and practices that properly reflect SWFs investment practices and objectives. The Principles are voluntary, which the members of the IWG support, and which they either have implemented or aspire to implement.
The following key areas are covered in the Principles: (i) legal framework, objectives, and coordination with macroeconomic policies; (ii) institutional framework and governance structure; and (iii) investment and risk management framework.
The guiding purpose of these Principles is to:
- have in place a transparent and sound governance structure that provides for adequate operational controls, risk management and accountability;
- ensure compliance with applicable regulatory and disclosure requirements in the countries in which SWFs invest;
- ensure SWFs invest on the basis of economic and financial risk and return-related considerations; and
- help maintain a stable global financial system and free flow of capital and investment.
This paper was prepared by the IWG Secretariat, based on information provided by the IWG members, for use by the IWG in drafting the Generally Accepted Principles and Practices for Sovereign Wealth Funds (GAPP). The document provides a consolidated look at some of the key SWF practices across countries.
Meeting of the International Monetary and Financial Committee
Washington, D.C., October 11, 2008
"We believe that the Santiago Principles will in both home and recipient countries improve the understanding of the objectives, structures, and governance arrangements of SWFs; enhance the understanding of SWFs as economically and financially oriented entities; and help maintain an open and stable investment climate. Through the implementation of the Santiago Principles, we seek to ensure that the international investment environment will remain open and our capital can continue to be put to use when it is most needed."
"Moreover, in the Santiago Principles, there are provisions confirming the IWG’s expectations that recipient counties will not subject the SWFs to discriminatory measures to which other foreign or domestic investors in similar circumstances are not subjected. We trust the recipient countries will support these provisions."
For additional information see: http://www.iwg-swf.org/index.htm