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Portuguese Insurance and Pension Funds Supervisory Authority Establishes Governance System for Pension Fund Management Entities

Yesterday, Regulatory Rule no. 6/2024-R, dated 12 September, was published by the Insurance and Pension Funds Supervisory Authority, which instituted a Governance System for Pension Fund Management Entities (“Regulatory Rule “).

The publication of the Regulatory Rule is a concretization of the regulatory powers set forth in Law no. 27/2020, dated 23 July, concerning the establishment and operation of pension funds and pension fund management entities (“RJFP“).

Among other matters, the following subjects are addressed, detailed, and/or expanded upon, with the aim of its improvement and reinforcement:

  • General governance requirements, in particular:
  • governance structures;
  • risk self-assessment and risk management system;
  • remuneration;
  • organization, operation, and strategic planning;
  • internal whistleblowing procedures;
  • outsourcing;
  • information disclosure; and
  • prevention, communication, and resolution of conflicts of interest;
  • The annual actuarial report on the financial status of each benefit plan;
  • The key responsibilities of the management body, highlighting the duties of implementing a code of conduct and promoting an organizational culture;
  • The internal policy for the selection and evaluation of the qualifications, suitability, and accumulation of responsibilities of the members of the management body and other persons who effectively manage the management entity, members of the supervisory body and the statutory auditor, top directors, persons responsible for key functions, and actuaries responsible for pension plans.

A duty was also established for the approval of a succession plan, at least for the members of the management body and key function holders.

The Regulatory Rule follows the best governance practices applicable to other regulated sectors, thereby completing the legal framework on this matter, which is praiseworthy.

Click the link below to access the document: https://diariodarepublica.pt/dr/detalhe/norma-regulamentar-autoridade-supervisao-seguros-fundos-pensoes/6-2024-887550468

For more information, please contact us via email at rvr@ccsllegal.com

[Photo by: Zoshua Colah, available at unsplash.com]

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