Regulatory Alerts2020-05-13 | 2020-08854Added
Good Faith Determinations of Fair Value
The Securities and Exchange Commission proposes Rule 2a-5 under the Investment Company Act of 1940 to establish comprehensive requirements for registered investment companies and business development companies to determine the fair value of their investments in good faith. The rule mandates that funds assess valuation risks, select and test methodologies, oversee pricing services, and maintain specific records, while permitting boards to delegate these duties to investment advisers subject to strict oversight. Additionally, the proposal defines when market quotations are readily available and rescinds prior guidance on board roles in fair value determinations and the accounting and auditing of fund investments.
Topics
Share