BNY Mellon Asset Servicing has introduced Fair Value Pricing, an automated system for valuing non-US equities after the European and Asian markets close. The system, was recently launched with a mutual fund complex, provides the updated valuations up until the closing of the New York Stock Exchange.
Reportedly, the automated system gathers data from multiple vendors as well as a factoring agency. The factor determines a daily multiplier that is used to alter the closing prices of these securities in their native markets. It has said that using the multiplier it brings the prices of the securities to a fair value that reflects events that impact stock prices between the closing of the native markets and the closing of the New York Stock Exchange. It has added that clients can have the option of determining the fair value of their securities through either the data vendors or the factor.
Steve Berggren, global accounting product manager for BNY Mellon Asset Servicing, said: “Fair Value pricing is an important tool for institutions such as mutual funds because it enables them to determine the value of the securities in their portfolios if a significant event occurs after the close of the markets that trade those securities. This enables us to calculate a more accurate net asset value (NAV) or Unitized Value. It also provides our clients with a standard method for a fund close price where securities are traded in multiple markets, providing more accuracy in price for participants entering or exiting a fund or plan. These reports enable investors to see how a fair value update changes the values of the securities they hold.”
