Generally Accepted Principles and Practices (GAPP) definition
The Santiago principles, generally accepted principles and practices (GAPP), are standardized procedures for sovereign wealth funds (SWFs) that prioritize financial objectives over politics and promote a stable global financial system.
The International Working Group of Sovereign Wealth Funds (IWG)—23 nations having SWFs—agreed on the GAPP in October 2008. The IWG addressed investor and regulator concerns about industry transparency, independence, and governance by requiring SWFs to demonstrate proper setup and focus on economic investments rather than political agendas.
GAPP states the following goals for SWFs: “special purpose investment funds or arrangements, owned by the general government”:
- To ensure global financial stability and capital and investment flow,
- To follow all regulatory and disclosure standards in their investment nations;
- Consider economic and financial risk and reward while investing;
- Establish transparent governance with adequate operational controls, risk management, and accountability.
The 24 voluntary Santiago Principles provide a framework for legal, institutional, investment, and risk-guiding principles. The International Forum of Sovereign Wealth Funds (IFSWF) promotes and honors these values through voluntary endorsement and implementation in governance and investing procedures. Over 30 sovereign wealth funds worldwide participated in the meeting in 2021.