Recommendations on Valuing Collective Investment Schemes (CIS): Final Report FR/03/2026

What it contains

Final Report FR/03/2026 of the IOSCO Board, dated 1 June 2026, unifies and replaces two earlier documents: the Principles for the Valuation of Hedge Fund Portfolios (2007) and the Principles for the Valuation of Collective Investment Schemes (2013). The review responds to three market changes: more funds holding less liquid or illiquid assets, including private ones; more retail investment in those funds; and the valuation difficulties experienced in episodes of volatility, such as in 2020. It applies to registered or authorized public open-ended funds, except money market funds, and regulators may extend it as good practice to other funds.

There are 13 recommendations: valuation policies and governance, conflicts of interest, methodology, price overrides, consistent application, periodic review, third-party valuation providers, purchases and redemptions at net asset value with forward pricing, valuation frequency, net asset value available to investors at no cost, disclosure, pricing errors and record keeping. The main novelties: effective and independent oversight of the valuation function and governance rules for stressed market conditions; an expanded framework for managing conflicts and disclosing those that cannot be mitigated; the requirement of fair value and guidance on back testing and calibration; more due diligence on third-party providers; a process to correct stale or inaccurate valuations; and a new recommendation on records.

The stated objective is fair and consistent valuation of assets, with more governance and accountability in the process, transparency toward investors and regulators, and less systemic risk arising from inaccurate or inconsistent valuations. The recommendations cover the whole valuation ecosystem: responsible entities or fund managers, internal valuation functions and committees, and third-party providers. For exchange-traded funds (ETFs), which are traded mostly on the secondary market, the net asset value remains relevant, so the recommendations apply with proportionate considerations, such as the dual pricing mechanism between the primary and the secondary market.

Resumen elaborado por el Club de Gestión de Riesgos de la República Dominicana a partir de la lectura del documento original, con fuente verificada el 18 de octubre de 2026. No sustituye la lectura del texto oficial ni constituye asesoría.

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