Singapore  - Representatives of sovereign wealth funds (SWFs) made progress toward voluntary guidelines aimed at easing fears of political interference, but details of such touchy issues as transparency are still to be finalized, the co-chairman of the gathering said on Thursday.

"This is a work in progress," said Hamad al Suwaidi, undersecretary of the Abu Dhabi Department of Finance, after the two-day working session of the SWG's International Working Group in Singapore.

He was optimistic the set of guidelines would be finished by September this year. "I don't think anything is holding us up," he told a telephone conference call with the media.

"The consensus among members to develop the generally accepted principles and practices has contributed significantly to the progress that has been achieved," said Hamad.

Although the talks were held behind closed doors, Hamad said all 25 SWFs support the core principles laid out by the IWG on May 1 in Washington DC, including the need for greater transparency.

The IMF estimates SWFs control 3 trillion US dollars in assets.

The highly-secretive wealth funds, investment funds owned by national governments, have become increasingly active in purchasing assets Western countries in the past year, often with cash from escalating oil prices and trade.

Political concerns have also been fuelled about foreign influence over domestic assets.

US and European lawmakers have called for greater transparency about the funds' investments and motives.

Acknowledging the set of guidelines would have no enforcement mechanism when finalized, Hamad said, "The process will not end there" and raised the prospect of "institutionalizing" it.

The IWG has established a process of continuing engagement with recipient countries, and has invited them to working meetings to enable recipients of SWF investments to contribute to the ongoing work, said Hamad and co-chairman Jaime Caruana, counsellor and director of the IMF's Monetary and Capital Markets Department, in a statement.

A third working group session will be held in Santiago, Chile September 1. "More than 50 per cent of the work has been completed," Hamad said. "What remains is at the detail level."

The core principles laid out by the IWG included helping maintain a stable global financial system and free flow of capital and investment, complying with applicable regulatory and disclosure requirements in the countries in which SWFs invest, investing on the basis of economic and financial risk in addition to having a transparent and sound governance structure.

Some funds, such as Norway's Government Pension Fund, publish portfolio holdings annually. Others such as the Abu Dhabi Investment Authority do not reveal their assets.

IWG member countries include Australia, Azerbaijan, Bahrain, Botswana, Canada, Chile, China, Equatorial Guinea, Iran, Ireland, South Korea, Kuwait, Libya, Mexico, New Zealand, Norway, Qatar, Russia, Timor-Leste, Trinidad and Tobago, the United Arab Emirates, the United States and Singapore.

The Government of Singapore Investment Corp is the longest-established SWF in the Asia-Pacific region, started in 1981. It publicly discloses assets under management of at least 100 billion US dollars, but estimates reach 300 billion dollars.

The Abu Dhabi Investment Authority is the largest. (dpa)