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  • Valuation

    • CIU-1.5.12

      CIU operators must ensure that, for each CIU that they operate, appropriate and consistent procedures are established so that a proper and independent valuation of the CIU assets can be performed. These procedures must be consistent with the constituent and offering documents of the CIU. The operator 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 a CIU and for periodic calculation of net asset values (NAV) and reporting and disclosure of the same to CIU 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 the CIU;
      (c) The assets held by the CIU 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 to CIU participants are addressed promptly, and CIU participants 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 the CIU valuation process at least annually.
      Added: April 2022

    • CIU-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 2022

    • CIU-1.5.14

      The frequency of valuations depends on the type of CIU. For open-ended CIUs, 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-ended CIUs, such valuations and calculations must be carried out in case of an increase or decrease of the capital of the CIU. 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