Does the Group favour the requirement of independent valuation of hedge funds?
The calculation of hedge fund net asset value or NAV is a vital task, because the price at which investors purchase and redeem the shares or units of the fund is based on the NAV. The Group recognises the paramount importance of independent valuation, in particular with respect to illiquid, unlisted or complex assets. It underlines that the lack of instances of hedge fund fraud in Europe is attributable (in large part) to the common European practice of using independent fund administrators. However, the prevailing view amongst experts is that the valuation of hedge fund assets is not an issue that can be addressed by legislation or the imposition of a requirement for an independent third party. Valuation is most appropriately managed by adherence to industry-led codes of conduct and best practice coupled with transparency of the valuation process for investors. The approach to set valuation principles proposed by the IOSCO Standing Committee 5 is based on an interaction process with t
