To the Point - SEC proposes rule to modernize fund valuation practices

30 Apr 2020 PDF
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Publications To the Point


The SEC proposed a new rule under the Investment Company Act of 1940 that would establish requirements that boards of registered investment companies and business development companies must follow to determine in good faith the fair value of portfolio holdings without readily available market quotations for purposes of the 1940 Act and would codify the common practice of assigning the determination of fair value to a fund's adviser, subject to certain conditions. The proposal would require fund boards or advisers they assign to determine fair value to periodically reassess and manage material valuation risks, including material conflicts of interest. The SEC also proposed rescinding certain guidance on the valuation, accounting, disclosure and auditing of fund investments. Our publication summarizes the proposal.

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