Finanstilsynet, the Financial Supervisory Authority of Norway imposed a corrective order on Norway's largest bank and asset manager, DNB Asset Management for closet-tracking. The fund manages more than 800 million EUR on behalf of 126.000 retail investors and has over the last 5 years charged is customers more than 40 million EUR. Finanstilsynet analysed the bank's performance over the last five years and while the equity fund concerned is marketed and priced as an actively managed fund, it performed very closely to its benchmark.
The supervisor considered this to be censurable and counter to good business practice and required DNB to either bring the management of the fund into line with the characteristics of active management and the management fee or to adjust the pricing of the fund to the management strategy that has in point of fact been applied.
The investigation was part of the supervisory tasks of Finanstilsynet over management companies. The authority investigates whether Norwegian equity funds that are marketed and priced as actively managed funds are in fact managed as such. The Authority also announced that more decisions like this are likely to be published in the near future.
For more detail, please read the article published on the website of Finanstilsynet.