Fair Value Pricing Survey, Eleventh Edition

Finding the formula that fits

This survey from the Deloitte US firm aggregates the views of 96 mutual fund firms. The participants represent a diverse mix of mutual fund firms covering various sizes, asset classes and geographies with more than $10 trillion in assets under management.

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It goes without saying that there is no precise formula for determining fair value and performing related oversight. Those charged with valuation responsibilities have to do what any scientist in a lab would do: pursue a course of action, measure the results, and then refine the approach, taking into account changes in internal and external factors.

Against the backdrop of the Morgan Keegan case, this year’s survey garnered the highest participation since we launched it in 2001: a record 96 mutual fund firms representing more than $10 trillion in assets under management completed the survey. The Morgan Keegan case, which came after a series of other Securities and Exchange Commission (SEC) enforcement actions was a strong indication of how seriously fund boards are treating valuation issues. Survey participants identified SEC enforcement actions as the most talked about valuation topic among board members outside of regularly scheduled meetings. These discussions as well as deliberations during regular board meetings gave directors opportunities to assess whether they needed to change elements such as the timing and frequency of their oversight, the type and extent of materials being reviewed, and the level of delegation provided to others.

Apart from the Morgan Keegan case, there were other events over the past year that generated meaningful consideration relative to valuation, including policies and procedures, pricing sources, and considerations for specific investment types. You are invited to explore further findings in this report.

Fair Value Pricing Survey, Eleventh Edition: Finding the formula that fits
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