REGULATION OF VALUATIONPRACTICES
As the industry regulator, SEBI aims at protecting the investors byensuring that the valuation practices adopted by the AMCs are: -
a) Based on principals of “fair valuation” of portfolio securities,
The fair valuation ensures that realistic prices are used to compute the value of theportfolios.
b) are uniform across the fund types and AMCs to the extent possible
Uniform valuation practices ensure that everyone can compare the performance of different schemes and AMCs without worrying about whether the fund valuationpractices may be different from one scheme to another.
AMCs therefore adopt uniform portfolio valuation practices to theextent possible, AMFI sets the industry standards on valuation. SEBI inturn regulates and
Prescribes detailed valuation methodologies in its fund regulations,
Mandates disclosure of valuation methods used for information of investors