Mutual funds and collective investment schemes
Last published: 12 March 2025
Supervision of fund managers is risk-based and focuses especially on managers' compliance with rules promoting consumer protection. Emphasis is placed on ensuring that mutual funds are retained as a regulated savings product with a high degree of investor protection. In its supervision of managers of alternative investment funds (AIFMs), Finanstilsynet gives precedence to matters of significance to retail investors.
Facts about mutual funds and collective investment schemes in Norway
Finanstilsynet supervises fund management companies and managers of alternative investment funds’ (AIFMs) compliance with the Securities Funds Act and regulations thereto. In addition, we supervise depositaries for funds established in Norway. At the end of 2024, 29 fund management companies were domiciled in Norway, managing a total of 383 mutual funds under licence from Finanstilsynet.
Assets under management in mutual funds domiciled in Norway totalled NOK 2 159 billion at end-September 2024, up NOK 357 billion from end-September 2023. UCITS funds account for 91 per cent of assets under management in mutual funds registered in Norway.
At year-end 2024, there were 61 Norwegian AIFMs licensed by Finanstilsynet and five Norwegian branches of AIFMs licensed in other EEA states. In addition, there were 179 registered AIFMs in Finanstilsynet’s registry. A total of 581 alternative investment funds (AIFs) domiciled in Norway were under management. As at 31 December 2023, their assets under management totalled NOK 262 billion (AIFs that are also mutual funds are excluded).
The figures are based on the companies' reporting to Finanstilsynet.
Supervision
During 2024, Finanstilsynet initiated eight inspections.
Finanstilsynet examined the design of a digital fund selector and price information on the website of a company and its tied agents. In Finanstilsynet’s opinion, the company had failed to provide clear and concise information, and the interests of its customers had been set aside in breach of the requirements for rules of conduct.
An inspection at a small fund management company revealed significant shortcomings in the overall management and control of the business. Finanstilsynet ordered the company to rectify a number of shortcomings, which includes establishing procedures for following up the funds’ investment strategies.
Finanstilsynet's investigations revealed that a few fund managers failed to meet the capital requirements. Following a rapid injection of new capital, Finanstilsynet did not revoke their licences.
When looking into the transfer of funds from a mutual fund between associated companies, Finanstilsynet uncovered serious shortcomings in the business conduct of a registered AIFM. The manager's only fund had been wound up, and the company asked Finanstilsynet to be deregistered. Finanstilsynet therefore did not make the announced decision.
Finanstilsynet has initiated an investigation of a management company’s valuation, liquidity and handling of conflicts of interest.
In 2024, Finanstilsynet conducted an ICT inspection at a large management company and AIFM. Finanstilsynet had comments to outsourcing agreements, key person risk, emergency preparedness and incident reporting.
An ICT inspection at an AIFM was also completed. The inspection focused on ICT security, management and control of ICT activities and the company's emergency preparedness in the ICT area.
Other matters related to consumer protection
The price of one and the same mutual fund varies among providers. Knowledge of the price differences between funds is important to enable consumers to make informed investment choices. In order to raise awareness of the large price differences, Finanstilsynet looked into the prices of 17 fund providers and 73 mutual funds in 2024. The results of the surveys were published in February and October.
Finanstilsynet has initiated a thematic inspection to investigate how distributors of mutual funds provide price information in their marketing.
The Act on key information on packaged and insurance-based investment products (PRIIPS Act) entered into force on 1 October 2024. Finanstilsynet has complied with the requirements by performing random checks at management companies and processing marketing applications from AIFMs.
Finanstilsynet processed a number of applications for mergers between mutual funds established in different countries. One management company was subject to special follow-up to ensure that the company complied with its disclosure obligations and facilitated the participation of unit holders at unit holder meetings.
AIFs with real estate investments
Due to the need for refinancing, managers of real estate funds had to carry out extraordinary capital raises again in 2024. When considering individual restructuring cases, Finanstilsynet uncovered weaknesses in the companies' risk management and valuation procedures.
Finanstilsynet examined 15 AIFMs' work on risk management, asset valuation and leverage in real estate funds, aiming to chart how the managers calculate and monitor fund valuations and leverage. A report with the most important observations is published on Finanstilsynet's website.
In 2024, Finanstilsynet initiated an inspection at an AIFM focusing on the valuation and liquidity management of one of the company's real estate funds.
Sustainability
Supplementary rules to the Act on disclosure of sustainability information in the financial sector etc. entered into force in December 2023. During 2024, Finanstilsynet worked on integrating the follow-up of the new sustainability rules into its ordinary supervision of mutual fund operations.
In 2024, Finanstilsynet initiated a thematic inspection of nine management companies and AIFMs on how they comply with sustainability disclosure requirements. The inspections will be completed in 2025. Preliminary findings show that many managers have devoted significant resources to complying with the Sustainable Finance Disclosure Regulation (SFDR). Nevertheless, some descriptions of relevant procedures are still inadequate and unclear. Several managers believe that the regulations in many ways are ambiguous, and that access to reliable and supplementary data represents a major challenge.
In autumn 2024, Finanstilsynet arranged a sustainability seminar for fund managers and investment firms, providing information on important aspects of the SFDR and sector-specific sustainability rules, as well as on preliminary findings from the thematic inspections, with an emphasis on practical examples.
Unlawful management and marketing of AIFs
Finanstilsynet ordered one company to cease its operations and published a market warning as investigations revealed that the company was managing and marketing an AIF without the required permits.
Guidance
Finanstilsynet has focused on providing good guidance and maintaining close dialogue with the companies. Several contact meetings were held with companies and trade associations, as well as various presentations.
Finanstilsynet prepared a guidance on the disclosure of price information in connection with the marketing and sale of mutual funds to consumers and other retail clients (Circular 1/2024 – in Norwegian only). Surveys had shown that price of mutual funds might be hard to find by customers. The circular explains what Finanstilsynet takes into account when following up fund distributors’ disclosure of price information. In a new circular 2/2024, certain requirements for the distribution of mutual funds were specified. The topics covered included inducements, nominee relationships and obligations in connection with unit holder meetings. In addition, Finanstilsynet published guidelines from the European Securities and Markets Authority (ESMA) concerning, among other things, marketing communication and fund names using sustainability-related terms. Finanstilsynet has used the guidelines as a basis for its supervision.
Administrative matters
New rules on the distribution of mutual funds in the EEA entered into force in October 2024. Finanstilsynet has linked up to ESMA's register of cross-border distribution of investment funds and uses ESMA's new digital solution (HUB) for notifications of marketing to and from Norway. Finanstilsynet has received a large number of reports on market soundings in and out of Norway.
In 2024, Finanstilsynet introduced a processing fee for cases concerning the marketing of AIFs managed by managers established outside Norway, requiring them to pay an annual supervisory levy.
Finanstilsynet processed a number of notifications from fund managers and applications for licences during 2024. These included licences to offer licensable services and market funds to professional and retail investors, applications for amendments to fund rules and mergers of mutual funds, notifications of fit and proper assessments of board members and management, and notifications of outsourcing of tasks and the liquidation and deregistration of funds.
Regulatory development
In 2024, Finanstilsynet prepared a consultation document proposing rules for the implementation of the changes to the EU regulations on the management of European long-term investment funds (ELTIF II).
Finanstilsynet prepared draft regulations to the PRIIPs Act, which entered into force in Norway in October 2024.