The Generally Accepted Principles and Practices (GAPP), also known as the Santiago Principles, pertain to standardized business procedures related to the operation of sovereign wealth funds (SWFs). These principles were developed to promote transparency, good governance, and accountability among sovereign wealth funds, which are large investment pools owned by sovereign nations.

Here are key points related to the Santiago Principles (GAPP):

1. **Development and Adoption:**
– The Santiago Principles were developed by the International Working Group of Sovereign Wealth Funds (IWG) and were first presented in 2008. The principles were named after Santiago, Chile, where the IWG reached a consensus on these guidelines.

2. **Objective:**
– The primary objective of the Santiago Principles is to establish a framework of generally accepted principles and practices that sovereign wealth funds should follow. The aim is to ensure that these funds operate in a manner that is transparent, accountable, and consistent with sound governance practices.

3. **Financial Focus:**
– One of the key aspects of the Santiago Principles is the emphasis on sovereign wealth funds pursuing financial and economic objectives rather than political goals. The principles encourage funds to focus on maximizing risk-adjusted financial returns.

4. **Transparency and Disclosure:**
– The Santiago Principles stress the importance of transparency and disclosure. Sovereign wealth funds are encouraged to provide clear and timely information about their investment policies, governance structure, and financial performance.

5. **Risk Management:**
– The principles outline the need for sovereign wealth funds to establish a robust risk management framework. This includes effective risk assessment, monitoring, and mitigation measures to safeguard the funds’ assets.

6. **Legal and Regulatory Framework:**
– Sovereign wealth funds are encouraged to operate within a clear legal and regulatory framework. Adherence to relevant laws and regulations is essential for ensuring the legitimacy and stability of the funds.

7. **Accountability and Internal Controls:**
– The Santiago Principles emphasize the importance of accountability and the establishment of strong internal controls within sovereign wealth funds. Clear lines of responsibility and oversight are critical components.

8. **Equitable Treatment of Shareholders:**
– The principles underscore the importance of treating shareholders, including minority shareholders, equitably. This involves fair and transparent dealings with all stakeholders.

9. **Stabilization of Global Financial System:**
– By promoting responsible and transparent behavior among sovereign wealth funds, the Santiago Principles contribute to the stabilization of the global financial system. These funds play a significant role in international capital markets.

10. **Ongoing Review and Assessment:**
– The Santiago Principles are not static; they are subject to periodic review and assessment. This ensures that the guidelines remain relevant and effective in addressing evolving challenges and changes in the global financial landscape.

The Santiago Principles provide a valuable framework for sovereign wealth funds to operate responsibly and contribute positively to the global financial system. As with any set of principles, their successful implementation relies on the commitment of sovereign wealth funds and the ongoing collaboration of the international community.