Regulatory Alerts2010-08-03
Guideline on the Fair Valuation of Financial Instruments
The Bank of Mauritius issued this guideline to require licensed banks and non-bank deposit-taking institutions to establish robust governance, control frameworks, and reporting processes for the fair valuation of financial instruments. It mandates clear board and senior management responsibilities, independent model validation, rigorous stress-testing, and appropriate valuation adjustments to ensure reliable pricing under both normal and stressed market conditions. Furthermore, the guideline standardizes third-party outsourcing practices, mandates transparent disclosures regarding valuation methodologies and assumptions, and takes effect on 1 November 2010.
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