Peru may give AFPs more investment choices

Peru is mulling changing the rules governing investment activities of the country's private pension fund managers, or AFPs as they are known.

Banking and insurance watchdog SBS has put its proposals out to public consultation.

SBS is considering, among other changes, increasing the investment options open to AFPs by permitting them to invest in the likes of foreign infrastructure funds, state news agency Andina reported.

The watchdog is also considering changes in areas including best practice, risk management and transparency and evaluation of foreign mutual funds.

"The modifications correspond to both the local and foreign markets and create a more flexible framework in terms of indirect investments," Andina said.

The public consultation period ends on 29 January, 2018.

Four AFPs operate in Peru: Habitat, Integra, Prima and ProFuturo. Assets under management at the end of October were 154bn soles (about US$47bn).

Read the draft rules (in Spanish)

In related news, SBS published new market risk rules which apply to financial system players. The rules cover areas such as responsibility of the board and managers in terms of management of market risk.

Among other requirements, banks must have market risk analysis tools in place, conduct stress tests and draw up contingency plans.

The new rules come into force on 1 June, 2018.

Read the new rules (in Spanish)