IVS 500 - Financial Instruments - Consultation
This Exposure Draft represents a significant milestone. It proposes a significantly different approach for an international standard to underpin the valuation of financial instruments. This will enhance the credibility and reliability of valuations of financial instruments, which is a globally systemic matter of importance to investors, regulators and others. The consultation runs for four months, closing on 19 April 2021. Details of how you can provide feedback are included within.
How to ensure a relevant and reliable valuation 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. The IVSC is the independent global standard setter for the valuation profession, responsible for setting the International Valuation Standards (IVS) which are applied in more than 100 countries through national and regional profession and standard-setting bodies. The IVS sets clear, internationally-accepted standards for the valuation of all asset types, including financial instruments.
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, the standard 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.
On behalf of the IVSC, the IVSC’s Financial Instruments Board, and all those involved in this important project, we would encourage you to review the Draft and share your feedback to help inform the final standard.