Enhancing the Transparency of Sovereign Wealth Funds: From the Middle East to China

Abstract: Sovereign wealth funds, as an active participant in the global capital market, have attracted increasingly more attention from both academicians and practitioners. The opacity of the funds is one of the hot issues. A greater transparency is needed for the Sovereign Wealth Funds (SWFs) in the Middle East when they play an increasingly important role in the global capital market. By reviewing the transparency standards and examining the performance of SWFs in the region on information disclosure, this article lists the political, economic and cultural causes of the opacity and justifies the varieties in transparency. It also finds that the legitimacy of these funds should not be challenged because the political motivation does not necessarily change their market attributes. Although effective management of the funds requires improvement of transparency, the transparency standards should be moderate in the context of economic integration and financial globalization, hence international governance is a must. In addition to the reflection on the role of IFSWF in international governance, some lessons and suggestions are given to China’s SWFs at the end of the paper.