Sovereign wealth funds must be regulated  A number of possible models of regulation have been suggested for sovereign wealth funds. Some, such as Gilson and Milhaupt, have argued that state-owned investment vehicles that buy shares abroad should not be allowed voting rights in that stock. [1] Others would put a cap on SWF investments, so that they cannot take a stake of more than, say 20% in any business without government approval within the country the SWF is investing in [2] – meaning that they can only be passive investors. Both these proposals would ensure that they are unable to abuse a dominant position while still allowing countries to benefit from cross-border investment in a globalised economy. At the same time such rules would prevent any broader protectionist backlash so the Sovereign Wealth Funds themselves could welcome the regulation.  [1] Gibson, Ronald J., and Milhaupt, Curtis J., ‘Sovereign Wealth Funds and Corporate Governance: A Minimal Solution to the New Mercantilism’, 2009.   [2] Garten, Jeffrey, ‘We need rules for sovereign funds, 2007,