CP12/32: Implementation of the Alternative ... - BVCA admin

CP12/32
Implementation of the Alternative Investment Fund Managers Directive
8
Management requirements
for AIFMs
8.1 This chapter covers requirements on AIFMs relating to valuation of an AIF’s assets,
including the use of an external valuer, management of liquidity within the AIF’s portfolios,
and use of leverage by AIFMs for AIFs under management.
November 2012
Valuation
8.2 AIFMs will be required to put appropriate and consistent procedures in place for the
proper and independent valuation of the assets of each AIF they manage. Also, the net asset
value (NAV) per unit or share of each AIF must be calculated and disclosed to investors at
least once a year. These requirements are transposed in FUND 3.9 and should be
incorporated into the constitutional documents of the AIF.
8.3 The Level 2 Regulation is expected to contain further information on the valuation
procedures that AIFMs must put in place. For example, it is likely that AIFMs will be
required to undertake periodic reviews of the valuation methodologies and the valuation
of individual assets where a material risk of inappropriate valuation might arise.
Appointment of an external valuer
8.4 FUND 3.9.7R will require an AIFM to carry out the valuation of the AIF itself or appoint
an external valuer. If an AIFM opts for an external valuer to perform the function, the
AIFM will be required to notify us of this appointment. The AIFM must demonstrate that
the external valuer is professionally registered and subject to legal or regulatory provisions
or professional conduct rules, and that the valuer can provide professional guarantees
assuring effective performance. The AIFM must also establish that the delegation safeguards
set out in FUND 3.10.2R, 3.10.4R and the Level 2 Regulation have been duly met.
Financial Services Authority 63