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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