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The guidelines highlight that legal provisions should be in place requiring the licensing of pension entities. The guidelines are meant to determine whether or not licensing applications stand up to certain criteria, including adequate governance structures; management in the best interest of plan members and other beneficiaries;  financial security and performance of pension entities; and maximum operational efficiency.   The guidelines outline criteria which can be used in the licensing assessment, including:  

  • Governing documents
  • Risk control, reporting and auditing mechanisms
  • Funding policy
  • Investment policy
  • Capital requirements
  • Governance structure
  • Business plan

The guidelines also stress that the legal provisions require the withdrawal of a licence in certain circumstances and that there should be the possibility of appealing to the decision to make such a withdrawal.    Finally the guidelines go on to outline the powers and obligations of the licensing authority - including the role of the authority in the supervisory oversight structure and the need for clarity in the licensing application procedure (including providing guidance material).