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High level of transparency about companies and countries

24 March 2015

Norwegian business daily Dagens Næringsliv published an article on Tuesday 24 March giving the impression that we have consciously sought to conceal that the fund has investments in companies registered in so-called secrecy jurisdictions. We refute this. We report annually on all our holdings, and this year we have expanded our reporting to include both more detailed and more consistent information than before.

The main purpose of publishing a list of the fund’s investments is to give an overview of companies and bonds we are invested in. In addition, we provide information on market value, ownership, voting rights, industry and country. When reporting information by country, there are generally three factors that are relevant: investment risk, jurisdiction and marketplace.

In our extended reporting from 2014, we have as previously chosen to apply the principles from the benchmark index given to Norges Bank through the mandate from the Ministry of Finance. The benchmark index classifies companies by country on the basis of investment risk, a method which gives a good indication of the country a company is associated with. Where a company is not included in the benchmark index, we use the country in which it is registered and listed, given that this is the same country. All other companies undergo a more detailed assessment. Previously we only used the jurisdiction (“country of incorporation”) for these companies. As part of the extended reporting as of 2014, we now specify both the country with which the company is associated and the jurisdiction. The new solution provides more information on jurisdiction for all investments, including those in the benchmark index. We are being more transparent than before, and we are being more consistent and precise by separating these different classification methods.

It is worth noting that the benchmark index has virtually the same percentage of investments in so-called secrecy jurisdictions as the fund. In the article in Dagens Næringsliv, it is claimed that it might appear that the fund has increased its use of “tax havens”. As a percentage of its market value, however, the fund’s investments in so-called secrecy jurisdictions remained more or less unchanged from 2013 to 2014.

We have updated the method for associating companies with countries as part of a broader review of how we present our holdings. The new method attaches more importance to investment risk. We have improved the search function in the holdings lists on our website by making more information available, and we have made the solution more user-friendly. We have:

  • Enabled searching in real estate investments, as well as equity and fixed-income investments
  • Added values in US dollars in addition to Norwegian kroner
  • Included historical developments
  • Added voting
  • Made it possible to generate custom reports in Excel or PDF format.

These improvements were launched together with the annual report on 13 March. Further updates will follow in the coming weeks. For example, we will specify jurisdiction for both equity and fixed-income investments, a feature currently available only for equities. We will also enhance the holdings lists and make it possible to include information on jurisdiction in the Excel reports that can be generated.

Finally, it is worth remembering that the equity portfolio is invested in shares listed on regulated and recognised marketplaces, and that the fund has set rules for approving marketplaces. Marketplaces themselves have their own listing rules and rules for reporting financial information.