Valuation
CIU-1.5.12
CIU operators must ensure that, for eachCIU that they operate, appropriate and consistent procedures are established so that a proper and independent valuation of theCIU assets can be performed. These procedures must be consistent with the constituent and offering documents of theCIU . Theoperator must ensure:(a) Comprehensive, documented policies and procedures, that are aligned to IFRS/AAOIFI or other accepted accounting and valuation standards are established to govern the valuation of assets held or employed by aCIU and for periodic calculation of net asset values (NAV) and reporting and disclosure of the same toCIU participants ;(b) The policies and procedures clearly identify the methodologies, tools and procedures that will be used for valuing each type of asset held by theCIU ;(c) The assets held by theCIU are consistently valued according to the policies and procedures;(d) The valuation policies and procedures address any current or potential conflicts of interest;(e) The policies and procedures in place seek to detect, prevent, and correct pricing errors;(f) The pricing errors (i.e. calculation errors) that result in material harm toCIU participants are addressed promptly, andCIU participant s fully compensated;(g) There are arrangements in place for the periodic review of the valuation policies and procedures to ensure their continued appropriateness and effective implementation; and(h) A third-party (e.g. external auditor) is appointed to review theCIU valuation process at least annually.Added: April 2022CIU-1.5.13
The valuation/pricing of listed securities must be obtained from the exchanges, bourses, or platforms on which the assets are listed. The valuation of unlisted securities and for listed securities for which the latest quotation is not representative must be based on the probable realisation value, estimated with international best practices. The valuation of illiquid asset classes, like real estate or private equity must be done by an independent third-party valuation agent or expert in the asset class.
Added: April 2022CIU-1.5.14
The frequency of valuations depends on the type of
CIU . For open-endedCIUs , such valuations and calculations must be carried out at a frequency which is both appropriate to the nature of underlying assets and its issuance and redemption frequency. For closed-endedCIU s, such valuations and calculations must be carried out in case of an increase or decrease of the capital of theCIU . In all cases, the valuation procedures used must ensure that the assets are valued and the net asset value per unit is calculated at least once a year.Added: April 2022