[13529]
May 21, 2001
TO: SEC RULES COMMITTEE No. 39-01
RE: FOREIGN SECURITIES VALUATION PAPER – MEETING ON JUNE 12TH
As previously indicated, the staff of the SEC’s Division of Investment Management
recently issued a letter to the Institute following up on its December 1999 letter regarding fund
pricing obligations.1 The new letter provides the staff’s views on a number of valuation issues,
including funds’ obligations with respect to the valuation of foreign securities. Notably, the
letter indicates that a fund must fair value foreign securities if a “significant event” occurs after
the close of the foreign market on which the securities primarily trade but before the time that
the fund has set for its NAV calculation.2
To assist members in complying with the staff’s fair value pricing guidance, particularly
as it applies to investments in foreign securities, the Institute plans to develop a supplement to
its 1997 paper on valuation and liquidity issues for mutual funds. We will hold a meeting of the
Foreign Securities Valuation Working Group (which met last summer on similar issues) to
discuss this project on Tuesday, June 12th at 10:00 a.m. in the David Silver Conference Room on
the 12th Floor at the Institute. Lunch will be served.
A list of members of the Working Group is attached. If you would like to join the
Working Group, add a representative to the Working Group, or change the current
representative(s) from your firm, please provide that information on the attached response form
and return the form by fax to Laura Whitehead at 202/326-5841 by Friday, June 1st.
Robert C. Grohowski
Associate Counsel
Attachments
Attachment no. 1 (in .pdf format)
1 See Memorandum to SEC Rules Members No. 37-01, dated May 1, 2001.
2 A “significant event” is defined in the staff’s letter as an event that will affect the value of the security.