On March 13, 2007, the Technical Committee of the International Organization of Securities Commissions (IOSCO) released for comment a paper entitled Principles for the Valuation of Hedge Fund Portfolios This link will open in a new window that proposes principles for the valuation of hedge fund portfolios.
The Chairman of the IOSCO Technical Committee, Michel Prada, said: "The chief aim of these principles is to seek to ensure that hedge funds' financial instruments are appropriately valued, in particular, that these values are not distorted to the disadvantage of fund investors. Therefore, it is extremely important, that hedge funds adopt and operate robust portfolio valuation policies and procedures".
The IOSCO principles seek to strengthen the valuation process by emphasizing the importance of ensuring that hedge funds apply their internal procedures in a strict and consistent manner. The principles also underline the importance of independent oversight in establishing and applying internal policies and procedures so as to reduce conflicts of interest for fund managers.
Québec's Autorité des marchés financiers (AMF), as a member of IOSCO, participates actively on IOSCO's committees and encourages the securities industry to comment on this paper. The closing date for comments is June 21, 2007.
This paper can also be downloaded from IOSCO's website This link will open in a new window.