Pricing and Fund Valuation

The value of the fund needs to be established. The value of the fund is calculated regularly, usually once per day, at a given time and the value of the assets at that precise time makes up the value of the fund for that day. Key components of the valuation include:

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Think about the different levels of controls that may be needed for more risky parts of the valuation, such as stale prices, suspended or unquoted securities, securities with only one price source, manually priced securities including some derivatives or price movements outside of given tolerances. What additional controls are needed around these parts of the valuation process?

To understand the Managers responsibilities and the required controlled environment, a good starting point is the Annex 1 of Chapter 7 of the FSAs CIS Sourcebook.

See www.funds-axis.com for more information on pricing and valuation.