Sun, Nov 19, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Are your pricing policies and procedures for less liquid instruments adequate?

Thursday, June 22, 2017

Komfie Manalo, Opalesque Asia:

The unrelated position mismarking incidents that quickly precipitated the closures of both Visium Asset Management and Marinus Capital have been recent focal points for market participants, but regulatory scrutiny of valuation choices for less liquid instruments is certainly not new. Askin, Piper Capital Management, and other market participants have also faced high profile regulatory/legal consequences when valuation issues exceeded regulatory tolerances (see the walk down memory lane below). However, even market participants who have had the good fortune of avoiding Wall Street Journal headlines likely still face challenges on a daily basis when marking less liquid and hard-to-value positions.

Capital Market Risk Advisors (CMRA) recommends:

  • Updating written policies and procedures to reflect new transaction types, new data sources, and new "lessons learned" from others' stumbles. It is all too easy to make policies a one-time exercise rather than monitoring and updating them as circumstances change.
  • Ensuring that written policies and procedures reflect your firm's actual practices rather than being aspirational. It is far better to "say what you do and do what you say" rather than memorializing an aggressive policy that you hope to one day achieve but that is not currently implemented.
  • Implementing a pricing process that results in a documented set of challenges and ......................

    To view our full article Click here

  • Today's Exclusives Today's Other Voices More Exclusives
    Previous Opalesque Exclusives                                  
    More Other Voices
    Previous Other Voices                                               
    Access Alternative Market Briefing

     



    • Top Forwarded
    • Top Tracked
    • Top Searched
    1. Middle East - Saudi-Iran war would create this domino effect of global disaster, Saudi billionaires said to move funds from region to escape asset freeze[more]

      Saudi-Iran war would create this domino effect of global disaster From CNBC.com: Events appear to be spinning out of control in the Middle East, and the threat a Saudi-Iranian war is looking increasingly credible. Make no mistake, an out and out conflict between the two nations would be

    2. Paradise Papers - Robert Mercer's effort to avoid taxes appears in Paradise Papers, Tycoon made $41m from 'people's fund', Oxford and Cambridge 'investing millions of pounds offshore', Paradise Papers reveal[more]

      Robert Mercer's effort to avoid taxes appears in Paradise Papers From Therealnews.com: The Guardian has reported that conservative billionaire and Trump backer Robert Mercer "appears as a director of eight Bermuda companies in the Paradise Papers," the trove of documents reviewed by the

    3. Wall Street hedge fund veteran hits highs with copycat tactics[more]

      From FNLondon.com: A Wall Street veteran who has made big returns for wealthy clients by piggybacking on the strategies of well-known hedge funds is taking his novel approach to stock-picking to institutional clients. Dixon Boardman, chief executive of $2.5bn fund of hedge funds Optima Fund Ma

    4. Launches - Eaton Vance, Oaktree to launch diversified credit NextShares fund, FIM launches Nordic AI-powered fund[more]

      Eaton Vance, Oaktree to launch diversified credit NextShares fund Eaton Vance Management, a subsidiary of Eaton Vance Corp., announced the expected mid-November launch of Eaton Vance Oaktree Diversified Credit NextShares, a new Eaton Vance-sponsored exchange-traded managed fund. Eaton Va

    5. Outlook - Gundlach's stock market warning comes true[more]

      From Bloomberg.com: Jeffrey Gundlach has been warning something's got to give. Based on the past two days, looks like we have our answer. Stocks fell around the world a second day and high-yield bonds headed for a fourth straight loss, resuming a historic correlation that the hedge fund manager on W