IOSCO’s publishes recommendations on the valuation of CIS

On 1 June 2026, IOSCO published its Final Report, “Recommendations on Valuing Collective Investment Schemes” (the Report).

This consolidates and updates IOSCO’s previous publications

• its 2007 Principles for the Valuation of Hedge Fund Portfolios and
• the 2013 Principles for the Valuation of Collective Investment Schemes

to take into account recent developments in asset management, both in terms of more complex investment products and a growing exposure to less liquid, illiquid and private assets.

The aim of the Recommendations is to facilitate fair and consistent asset valuation across Collective Investment Schemes (CIS) in order to strengthen governance, promote transparency and mitigate potential systemic risk arising from inaccurate/inconsistent valuations.

The Recommendations

The 13 Recommendations set out in the Report are as follows

Policies and governance

1. The responsible entity should establish comprehensive, documented policies and procedures to govern the valuation of fund assets and ensure an appropriate level of independence in the valuation processes.

Conflicts of interest

2. The responsible entity should seek to identify, document, monitor and appropriately manage potential conflicts of interest in the valuation process. Where material conflicts of interest cannot be effectively managed or mitigated, the responsible entity should provide appropriate disclosure in accordance with applicable laws and regulations.

Valuation methodology

3. The policies and procedures should identify appropriate methodologies that will be used for valuing each type of asset held. The responsible entity should ensure all fund assets are valued at fair value.

4. The policies and procedures should describe the process for handling and documenting price overrides, including appropriate and proportionate oversight of price overrides.

Consistency in valuation

5. The assets held or employed by an Open Ended Fund (OEF) should be consistently valued according to the policies and procedures.

6. The responsible entity should provide for the periodic review of the valuation policies and procedures to ensure their continued appropriateness and effective implementation. The OEF valuation policies and procedures should be reviewed at least annually.

The use of third party valuation service providers

7. The responsible entity should conduct initial and periodic due diligence on third party valuation service providers that are appointed to perform valuation services. The process for the use of third party valuation service providers should be properly documented in the fund’s valuation policies and procedures.

Timely valuation

8. The subscription and redemption of OEF units generally should be effected at NAV based on forward pricing.

9. An OEF should be valued on any day that units are subscribed or redeemed, and the responsible entity should ensure that valuations are not stale or inaccurate.

Disclosure practices

10. An OEF’s NAV should be available to investors at no fee.

11. The responsible entity should seek to ensure that arrangements in place for the valuation of the assets in the portfolio and other relevant information are disclosed appropriately to investors in the OEF offering documents or otherwise made transparent to investors.

Pricing errors

12. A responsible entity should have policies and procedures in place that seek to detect, prevent, and correct pricing errors. Pricing errors that result in a material harm to OEF investors should be addressed promptly, and investors fully compensated.

Record-keeping

13. The responsible entity should maintain appropriate documentation to demonstrate compliance with their valuation obligations.

Scope

The Recommendations apply broadly to registered / authorised public OEF except money market funds (MMF).

They encompass responsible entities or fund managers, internal valuation functions and committees as well as third-party valuation service providers.

MMFs

The exclusion of MMFs reflects their unique characteristics regarding limitations on the assets in which such funds can invest, valuation, use of amortized cost, liquidity management etc. These are set out in IOSCO’s separate Policy Recommendations for Money Market Funds, published in 2012.

Exchange-Traded Funds

ETFs, on the other hand, are generally in scope of the Recommendations like other OEFs.

Core governance, controls, and valuation methodology expectations apply to ETFs. However, the Report notes that certain valuation issues may be less relevant for ETFs than for other funds due particularly to their distinct product structures and characteristics - Recommendations or guidance that assume, for example, that investors subscribe or redeem directly with the fund at NAV should not be interpreted as applying to secondary market trading, where ETF shares trade at market prices.

Other Funds

For other funds (such as (i) closed-ended funds or (ii) CIS for which the applicable jurisdiction regulates the responsible entity but does not impose valuation requirements at the level of the CIS), IOSCO holds out the Recommendations as potential Good Practices for Securities Regulators and responsible entities to consider.