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

    Fitch Opens New Chapter with Data Distribution and AI Strategy

    Fitch Solutions’ recent extension of its distribution strategy to include a presence on Snowflake is the first step in a programme of leveraging the company’s huge cache of credit ratings and research data. The move, which saw Fitch add its core credit ratings products on Snowflake Marketplace earlier this year, will be followed by other...

    EVENT

    Buy AND Build: The Future of Capital Markets Technology

    Buy AND Build: The Future of Capital Markets Technology London 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

    Practical Applications of the Global LEI – Client On-Boarding and Beyond

    The time for talking is over. The time for action is now. A bit melodramatic, perhaps, but given last month’s official launch of the global legal entity identifier (LEI) standard, practitioners are rolling up their sleeves and getting on with figuring out how to incorporate the new identifier into their customer and entity data infrastructures....