Addresses valuation of securities issued by controlled companies (as defined in section 2(a)(9)) using other than available market quotations.Īuthorizes Commission to issue rules relating to redeemable securities issued by open-end funds. When market quotations are not readily available, a fund must use fair values, as determined in good faith by the fund’s boards of directors, to value its portfolio securities and other assets. Investment Company Act of 1940ĭefinition of “value.” The value of securities held by registered investment companies (“funds”) is the market value when market quotations are readily available. Please refer to the referenced material for a complete understanding, including relevant context. Please refer to the referenced material for a complete understanding, including relevant context.Īlso included in the bibliography are proposing releases, select staff guidance (including no-action letters), and enforcement actions in this area. The bibliography below lists select relevant provisions of the Investment Company Act and related rules and Commission guidance, which is intended to assist funds and their counsel in understanding and applying the valuation requirements under the Investment Company Act. Money market funds may value their portfolio securities on the basis of amortized cost pursuant to rule 2a-7 under the Investment Company Act. Funds use these values to calculate their net asset values and the prices at which they sell and redeem their shares. When market quotations are not readily available, funds must value portfolio securities and all other assets by using their fair value as determined in good faith by the board of directors of the funds. The Investment Company Act of 1940 (“Investment Company Act”) generally requires registered investment companies (“funds”) to use market values to value portfolio securities for which market quotations are readily available. Please consult the following web pages for more information: SOME OF THE GUIDANCE REFERENCED AND OUTLINED IN THE BIBLIOGRAPHY HAS BEEN MODIFIED OR WITHDRAWN.
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