Regulatory departments recently to the fund management companies, Fund trustees bank “on the implementation of the securities investment funds,” Accounting Standards for Business Enterprises “and the valuation of business valuation of the share of net Matters of the “Notice to regulate all types of investment funds varieties of business valuation, ensure that the Fund implementation of the new accounting criteria for a timely and accurate valuation of the net value of shares.

Industry experts said that the Fund related to the valuation policy adjustments, the goal is to become more accurate truly reflect the Fund related financial assets and financial liabilities at fair value. Affected by the impact of the policy adjustment is quite obvious that the closed-end funds and inter-bank bond transactions in the market valuation of bonds varieties. Fund will be closed to investment valuation varieties day average price change in the valuation of the investment varieties U ton valuation; inter-bank market transactions denominated bonds will cost the transformation of the mode of valuation techniques used to determine the fair value method.

“Notice” clearly, there is an active market for the investment species such as the valuation date market value should be used to determine fair market value. Valuation of the day the market, but recent transactions future economic environment has not undergone major changes. recent transactions should be used to determine fair market value. Valuation of the day the market, and recent transactions future economic environment has undergone major changes, The investment should make reference to the current market value of species and major changes in factors, the market price adjustment recent transactions to determine fair value. Have sufficient evidence that the recent trading prices can not truly reflect the fair value, in response to the recent trading price adjustments determine fair value.

There is no active on the investment market varieties, market participants should adopt generally accepted, who was previously the actual market price verification reliability of the valuation technique to determine fair value. Valuation techniques used the results should be reflected in the valuation under fair conditions for normal business transactions of the transaction price. Valuation techniques used to determine fair value, should, as far as possible the use of market participants consider the pricing of all market parameters, and through regular check to ensure that the effectiveness of valuation techniques.

There were sound reasons for the valuation of the above is not an objective reflection of the variety of investment related to the fair value, Fund management companies should be based on specific situations and trust banks agreed to by the most appropriately reflect the fair value price valuation.

With regard to the specific investment with the valuation, “notification” clear, and the stock exchange listing to U E valuation, Listed bonds to U ton valuation, the futures contract settlement price valuation. So trading transactions bulk transfer of asset-backed securities, valuation techniques used to determine the fair value; in the valuation of reliable measurement techniques to the fair value of the situation, the cost of follow-up measures.

First Issue of unlisted stocks, bonds and warrants, valuation techniques used to determine fair value. In the valuation techniques to reliable measurement of the fair value, measured at cost; Pay stock dividends, converting Unit allotments and open additional new shares issued, such as unlisted stocks, according to Stock Exchange listing in the same stock market valuation; IPO lock-up period clearly shares the same stocks listed in the exchanges, by the Stock Exchange listing of the same stock market valuation; Closed issued a clear lock-up period of shares determined in accordance with relevant provisions of fair value.

Due to the stock holders of the equity allocation, and cease trading firms but not the E valuation techniques used to determine fair value. National inter-bank bond market transactions of the bonds, asset-backed securities and other fixed income varieties, valuation techniques used to determine fair value.

“Notification” requirement, the fund management companies should develop and share valuation of the net value of the pricing error identification and emergency programs. When the share valuation or valuation of the net value of errors when they occur, the fund management companies should be rectified immediately, timely to take reasonable measures to prevent the losses from expanding further. When errors reach or exceed the net value of fund assets 0.25%, fund management companies should be promptly reported to the SFC.

Fund management companies and custodian banks conduct valuation of the Fund, calculated or fund share net review process, failure to comply with the relevant legal regulations or contractual funds, property or funds to fund share holders caused the damage, should be individually responsible for their own acts according to liability; due to the acts of common property fund or fund share holders caused the damage, should bear joint liability.

Copyright Fund China 2009.

You Might Like: