Santiago Principles Self-Assessment

National Development Fund of Iran

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  • Pillar 1: Legal
  • Pillar 2: Institutional
  • Pillar 3: Investment
Principle 1

1. The legal framework for the SWF should be sound and support its effective operation and the achievement of its stated objective(s).

1.1. The legal framework for the SWF should ensure legal soundness of the SWF and its transactions.

1.2. The key features of the SWF’s legal basis and structure, as well as the legal relationship between the SWF and other state bodies, should be publicly disclosed.

NDFI was established under Article 84 of the Fifth Five Year Development Plan (Articles of Association (AoA)) as an independent entity. The state of I. R. Iran owns the assets. The objectives and responsibilities of various levels have been clarified in the AoA.

NDFI is operated by its Board of Executive Directors. Board of Trustees sets the strategies and policies while Supervisory Board oversees NDFI operations.

NDFI has an independent legal personality. Its three-tier management includes the Board of Trustees, Board of Executive Directors and Supervisory Board. The AoA, bylaws, contracts, structure and other documents are made public and posted on its website:


Principle 6

6. The governance framework for the SWF should be sound and establish a clear and effective division of roles and responsibilities in order to facilitate accountability and operational independence in the management of the SWF to pursue its objectives.

NDFI was established as a separate statutory entity to turn oil and gas revenues into productive investments and conserve share of future generations. The Board of Trustees, as described in AoA, manages NDFI and oversees activities of Board of Executive Directors. Roles and responsibilities of the Board of Trustees and Board of Executive Directors have been clearly mentioned and level of responsibility and accountability clarified in AoA.

Principle 18

18. The SWF’s investment policy should be clear and consistent with its defined objectives, risk tolerance, and investment strategy, as set by the owner or the governing body(ies), and be based on sound portfolio management principles.

18.1. The investment policy should guide the SWF’s financial risk exposures and the possible use of leverage.

18.2. The investment policy should address the extent to which internal and/or external investment managers are used, the range of their activities and authority, and the process by which they are selected and their performance monitored.

18.3. A description of the investment policy of the SWF should be publicly disclosed.

AoA sets the minimum rate of return of NDFI investments (not less than the return on Central Bank deposits). IPS states a minimum 4% rate of return with low risk, consistent with other, more conservative, sovereign wealth funds. Portfolio management strategies, risk tolerance and investment strategies are defined and set in IPS.

IPS determines investment policy which includes definition and limits of risk exposure. Use of derivatives is prohibited. At present, external asset managers make all cross-border investments.

Use of internal and external investment managers and the range of their activities and authority has been stated in the IPS. Investment managers’ Selection process, oversight mechanism and assessing their performance has been stated in the IPS.

IPS describes NDFI investment policy and will be publicly disclosed once approved by the Board of Trustees.