About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Derivative Valuations at UCITS Funds – Regulatory Requirements and Best Practices

Subscribe to our newsletter

OTC Valuations Limited (OTC Val), a leading provider of independent valuation and transparency reports for structured products and OTC derivatives, is pleased to announce it has released a white-paper outlining the regulatory requirements and best practices at UCITS funds for derivative valuations.

Key points from the paper, available from www.otcvaluations.com, include:

  • OTC derivatives are now permitted to be used as part of a UCITS’ general investment policy.
  • UCITS must have a primary valuation source that is verified by an independent third party or through an independent unit within the UCITS.
  • All OTC derivative valuations should be verified on a daily basis.
  • There are considerable costs and benefits of automating a valuation process, where some UCITS will take the challenge of bringing the process in-house process, while others will substantially benefit by outsourcing the process.
  • Bob Sangha, partner at OTC Val, notes that “while most jurisdictions have accepted the counterparty valuation as the primary source, all jurisdictions mandate price verification by an independent source. And while the frequency of price verification ranges, best practice is moving towards weekly and daily reports. These valuation reports should be sufficiently transparent such that the UCITS is able to readily understand the results.”

    Subscribe to our newsletter

    Related content

    WEBINAR

    Recorded Webinar: Navigating a Complex World: Best Data Practices in Sanctions Screening

    As rising geopolitical uncertainty prompts an intensification in the complexity and volume of global economic and financial sanctions, banks and financial institutions are faced with a daunting set of new compliance challenges. The risk of inadvertently engaging with sanctioned securities has never been higher and the penalties for doing so are harsh. Traditional sanctions screening...

    BLOG

    Synechron-Cognition Collaboration Seeks to ‘Shift Paradigm’ in Software Creation

    The race to harness artificial intelligence to create data products and software for financial institutions is at the heart of a collaboration between consultancy Synechron and technology developer Cognition. New York-headquartered Synechron, which has longstanding expertise in providing software solutions that financial organisations use to transform their operations, has embedded Cognition’s Devin agentic engineering platform...

    EVENT

    TEST Event page 1

    Now in its 15th year the TradingTech Summit London brings together the European trading technology capital markets industry and examines the latest changes and innovations in trading technology and explores how technology is being deployed to create an edge in sell side and buy side capital markets financial institutions.

    GUIDE

    The Data Management Implications of Solvency II

    This special report accompanies a webinar we held on the popular topic of The Data Management Implications of Solvency II, discussing the data implications for asset managers and their custodians and asset servicers. You can register here to get immediate access to the Special Report.