How to ensure relevant and reliable valuations of financial instruments has long been an area of significant focus for investors, regulators and others.
Market dislocations, such as that caused recently by COVID-19, continue to illustrate the importance of this topic.
Financial instruments, which often trade across international borders, require a valuation approach which is internationally consistent and carried out to a high standard.
In December 2018, the IVSC constituted a new Financial Instruments Board, tasked with reviewing and improving IVS 500: Financial Instruments. That Board - which brings together senior representatives from global banks and other institutions, regulators, auditors, analysts and others - has now concluded the first of two phases of a proposed new standard, resulting in the publication of this Exposure Draft.
If the standard is to have the desired impact of building confidence in valuations, it needs to be credible and implementable. That requires the Exposure Draft to be informed by those that commission, prepare, review and ultimately use valuation information. In arriving at the Exposure Draft the IVSC has worked with many interested parties, but in order to ensure that the standard is of the highest quality it is vital that all constituents feedback their comments on the Draft by the closing date of 19 April 2021.
This Exposure Draft represents a hugely significant evolution in the valuation of financial instruments and the IVSC is eager to hear your thoughts.