Aimed at modernizing valuation practices, the SEC Rule 2a-5 seeks to provide a framework for fund valuation practices which fund boards can use to create processes to determine fair value of investments in good faith.

To comply, fund boards need a detailed understanding of processes and methodologies used by vendors for fair value pricing and as part of this review, additional transparency metrics to assist in the validation process is essential. Requirements may also vary across asset classes given nuances from fixed income securities to derivatives.

To help manage compliance requirements, our due diligence platform, PVR Source, offers a centralised space to access methodology documents, backtesting reports, aggregated challenge statistics across fixed income and derivatives valuations that can readily be presented to the board.