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Section
1: When?
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1.
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The manager must carry out
valuations under CIS 15.8.3 R (1) (Regular
valuations) regularly.
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2.
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The
frequency of regular valuation must be specified in the prospectus.
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3.
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The
frequency specified must be at least twice a calendar month.
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4.
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If
the frequency specified is the minimum frequency, the regular valuations must
be two weeks or more apart.
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5.
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Paragraphs
3. and 4. do not apply to warrant
schemes or to a sub-fund which
is permitted to invest entirely in warrants and
there must be at least one valuation
point for them on each business
day.
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6.
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Additional
valuations under CIS 15.8.3 R (2) can
take place at any time during a dealing
day.
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7.
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There
is no need to value during the period of an initial offer (but see CIS 15.2.6 R (Compulsory termination of initial offer)).
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Section
2: How?
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8.
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The
valuation takes place as at a valuation
point fixed by the manager under
Section 1.
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9.
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The
valuation is in base currency.
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10.
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Prices
must be the most recent prices that can reasonably be obtained after the valuation point with
a view to giving an accurate valuation as at that point.
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11.
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A
valuation is in two parts, one on an issue basis
and one on a cancellation basis.
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12.
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To
convert to base currency the
value of property which would otherwise be valued in another currency the manager must either:
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(a)
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Select
a rate of exchange which represents the average of the highest and lowest
rates quoted at the relevant time for conversion of that currency into base currency on the market
on which the manager would
normally deal if
it wished to make such a conversion; or
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(b)
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Invite
the trustee to
agree that it is in the interests of Unitholders to
select a different rate, and, if the trustee so
agrees, use that other rate.
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Section
3: What?
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13.
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All scheme property is included,
subject to adjustments arising from this section, and section 4, and this
section is to be applied as at the valuation
point.
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14.
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If
the trustee has
been instructed to issue or
cancel units,
assume (unless the contrary is shown) that:
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(a)
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it
has done so;
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(b)
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it
has paid or been paid for them; and
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(c)
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all
consequential action required by these rules or
by the trust deed has
been taken.
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15.
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If
the trustee has
issued or cancelled units but
consequential action as at 14(c) is outstanding, assume that it has been taken.
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16.
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If
agreements for the unconditional sale or purchase of property are in existence but uncompleted, assume:
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(a)
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completion;
and
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(b)
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that
all consequential action required by their terms has been taken.
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17.
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Do
not include in 16. any agreement which is:
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(a)
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A future or contract for differences which
is not yet due to be performed; or
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(b)
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An
unexpired option written
or purchased for the AUT which has not yet been exercised.
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18.
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Include
in 16 any agreement the existence of which is, or could reasonably be expected
to be, known to the person valuing
the property, assuming that all other persons in
the manager's employment
take all reasonable steps to inform it immediately of the making of any agreement.
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Section
4: Tax and other adjustments
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19.
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Deduct
an estimated amount for anticipated tax liabilities:
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(a)
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On
unrealised capital gains where the liabilities have accrued and are payable
out of the scheme property;
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(b)
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On
realised capital gains in respect of previously completed and current accounting
periods;
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(c)
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On
income where the liabilities have accrued;
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(d)
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Including
stamp duty reserve tax and any other fiscal charge not covered under this
deduction.
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20.
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Deduct:
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(a)
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an
estimated amount for any liabilities payable out of the scheme property and any tax on it (treating
any periodic items as accruing from day to day);
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(b)
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the
principal amount of any outstanding borrowings whenever payable;
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(c)
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any
accrued but unpaid interest on borrowings;
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(d)
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the
value of any option written
(if the premium for
writing the option has
become part of the scheme
property); and
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(e)
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in
the case of a margined contract, any amount reasonably anticipated to be paid
by way of variation margin (that
is the difference in price between the last settlement price, whether or not
variation margin was
then payable, and the price of the contract at the valuation point).
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21.
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Add
an estimated amount for accrued claims for repayment of taxation levied:
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(a)
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on
capital (including capital gains); or
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(b)
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on
income.
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22.
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Add:
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(a)
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any
other credit due to be paid into the scheme
property;
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(b)
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in
the case of a margined contract, any amount reasonably anticipated to be received
by way of variation margin (that
is the difference in price between the last settlement price, whether or not
variation margin was
then receivable, and the price of the contract at the valuation point);
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(c)
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any SDRT provision anticipated
to be received.
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Section
5: Issue Basis
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23.
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The
valuation of property for that part of the valuation which is on a creation
basis is as follows:
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Property
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To be valued
at
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(a)
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Cash
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nominal value
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(b)
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Amounts
held in current and deposit accounts
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nominal value
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(c)
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Property
which is not within (a), (b) or (d):
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(i)
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if units in an AUT to which CIS 15 (Dual-pricing and dealing) applies
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except where
Note 1 applies, the most recent maximum sale price
less any expected discount (plus dealing costs)
[Note 2]
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(ii)
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if shares in an ICVC or units of an AUT to which CIS 4 (Single-pricing
and dealing) applies
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the most recent
price (plus dealing costs)
[Notes 2 and 3]
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(iii)
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if any other investment
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best available
market dealing offer
price on the most appropriate market in a standard size (plus dealing costs) [Note 2]
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(iv)
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if other property,
or no price exists under (i), (ii) or (iii).
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manager's reasonable estimate
of a buyer's price (plus dealing costs)
[Notes 2 and 4]
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(d)
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Property
which is a derivative under
the terms of which there may be liability to make, for the account of the AUT, further payments (other
than charges, and whether or not secured by margin) when the transaction in the derivative falls to be
completed or upon its closing out.
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(i)
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if a written option under rule 20(d)
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to be deducted
(see 20(d)) at a net valuation of premium.
[Notes 5 and 8]
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(ii)
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if an off-exchange future
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net value on
closing out [Notes 6 and 8]
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(iii)
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if any other
such property
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net value of margin of closing out
(whether as a positive or negative figure) [Notes 7 and 8]
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Notes
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1.
The issue price is
taken, instead of the maximum sale price
if the manager of
the AUT whose scheme property is being
valued is also the manager,
or an associate of
the manager,
of the AUT whose units form part of that
property.
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2.
In this Section and in Section 6, "dealing costs" means any fiscal charges, commission or other charges
payable in the event of the AUT carrying
out the transaction in question, assuming that the commission and charges (other than fiscal
charges) which would be payable by the AUT are
the least that could reasonably be expected to be paid in order to carry out
the transaction. On the issue basis, dealing costs exclude
any preliminary charge on sale of units in an AUT.
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3. Dealing costs under note
2. Include any dilution
levy or SDRT
provision which would be added in the event of a purchase by
the AUT of
the units in
question but, if the manager of
the AUT being
valued, or an associate of
the manager,
is also the manager of
the AUT or
the ACD of
the ICVC whose units are held by the AUT, must not include a preliminary charge which
would be payable in the event of a purchase by
the AUT of
those units.
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4
The buyer's price is the consideration which would be paid by a buyer for
an immediate transfer or assignment (or, in Scotland, assignation) to him
at arm's length.
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5.
Estimate the premium on
writing an option of
the same series on the best terms then available on the most appropriate market
on which such options are
traded; but deduct dealing costs.
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6.
Estimate the amount of profit or loss receivable or incurable by the AUT on closing out the
contract. Deduct minimum dealing costs in the case of profit and add them
in the case of loss.
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7.
Estimate the amount of margin (whether
receivable or payable by the AUT on
closing out the contract) on the best terms then available on the most appropriate
market on which such contracts are traded. If that amount is receivable (for
example, the contract is "in the money") deduct minimum dealing costs. If,
however, that amount is payable (for example, the contract is "out of the
money") then add minimum dealing costs to the margin and the value is that figure as a
negative sum.1
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8.
If the property is an OTC transaction
in derivatives,
use the relevant valuation referred to in CIS 5.2.25 R (OTC
transactions in derivatives) or CIS 5A.6.6 R (OTC
transactions in derivatives).
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Section
6: Cancellation basis
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24.
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The
valuation of property for that part of the valuation which is on a cancellation basis is
as follows:
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Property
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To be valued
at
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(a)
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Cash
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nominal value
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(b)
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Amounts
held in current deposit and loan accounts
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nominal value
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(c)
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Property
which is not within (a), (b) or (d):
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(i)
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if units in and AUT to which CIS 15 (Dual-pricing and dealing) applies
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except where
Note 1 applies, the most recent minimum redemption
price (less dealing costs) [Note 2]
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(ii)
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if shares in an ICVC or units in an AUT to which CIS 4 (Single-pricing
and dealing) applies
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the most recent
price (less dealing costs)
[Notes 2 and 3]
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(iii)
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if any other investment
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best available
market dealing bid
price on the most appropriate market in a standard size (less dealing costs) [Note 2]
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(iv)
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if other property,
or no price exists under (i) or (ii)
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manager's reasonable estimate
of a seller's price (less dealing costs) [Notes 2 and 4]
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(d)
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Property
of the type described in 23.:
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(i)
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if a written option under 20.(d)
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to be deducted
(see 20(d)) at a net valuation of premium [Notes
5 and 8]
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(ii)
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if an off-exchange future
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net value of
closing out [Note 8]
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(iii)
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if any other
such property
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net value of margin on closing out
(whether as a positive or negative figure) [Notes 6 and 8]
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Notes
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1.
The cancellation price
is taken instead of the minimum redemption
price if the property, if sold in one transaction, would amount
to a large deal.
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2.
For dealing costs
see note 2. In 23.. Dealing costs include any charge payable on redemption of units in an AUT (taking account of
any expected discount), except where the manager of
the AUT whose
property is being valued is also the manager,
or an associate of
the manager,
of the AUT whose units form part of that
property.
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3. Dealing costs under note
2. include any dilution
levy or SDRT
provision which would be deducted in the event of a sale by the AUT of the units in question and,
except when the manager of
the AUT being
valued, or an associate of
the manager,
is also the manager of
the AUT or
the ACD of
the ICVC whose units are held by the AUT, include any charge
payable on the redemption of
those units (taking
account of any expected discount).
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4.
The seller's price is the consideration which would be received by a seller
for an immediate transfer or assignment (or, in Scotland, assignation) from
him at arm's length, less dealing costs.
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5.
Estimate the premium on
writing an option of
the same series on the best terms then available on the most appropriate market
on which such options are
traded, and add dealing costs.
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6.
For off-exchange futures, see note 6 in
23.
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7.
For net value of margin see
note 7 in 23.
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8.
For over the counter transactions
in derivatives,
see note 8 in 23.2
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