By Gavin Adamson

(October 1 – 16:30 ET) – The
Investment Funds Institute of
Canada will soon release a report
for comment by the fund industry
that will eventually lead to
setting minimum standards
surrounding NAV – net asset
valuation – errors.

Given the sheer volume of trades
involved in maintaining more than
1,700 funds, errors sometimes
occur in pricing individual
stocks, affecting the NAV of the
overall fund. Sometimes pricing
feeds are wrong. Sometimes fund
managers don’t do the double
checking they should. And
sometimes the fund companies
haven’t developed adequate
oversight of the trading
process.

Whatever the reason, IFIC says
it wants to establish some sort
of benchmark for recognizing the
errors and correcting them. At
this week’s IFIC conference,
industry auditing experts
presented a couple of rudimentary
models, based on US and UK
examples, for acknowledging the
errors and compensating
unitholders.