The Investment Funds Institute of Canada’s final guidelines on fair valuing portfolio securities is enjoying further scrutiny as a result of the events of September 11.

IFIC’s senior counsel Leslie Byberg says that IFIC’s Fair Valuing Working Group was very close to finalizing its report before the attack on the World Trade Center and the resulting market disruption.

In the wake of the attack, Canadian markets were closed for two days, and traded for two days while U.S. markets were closed. The regulators granted relief from pricing for funds with material exposure to the United States, but those without material exposure had to use fair valuing techniques to come up with net asset values for their funds while U.S. markets were offline.

“Given what we have learned from that unprecedented experience, we are going to elaborate on some elements of the report, such as the suspension of trading discussion,” says Byberg. She says that she expects the report will be finalized in the next couple of months.

The group issued a preliminary report for comment last October 30. The group was formed at the request of IFIC’s Regulatory Steering Committee in February 2000 to develop guidelines for the fair valuing of portfolio securities by investment funds and other pooled asset management vehicles. The report is meant to provide guidance as to what processes a fund should follow to determine a fair value.