GLG News by Valuation Specialists

Can the SEC protect investors without regulation? 

Recently, the SEC eliminated the GAAP reconciliation requirement as part of Form 20-F for foreign issuers.  Almost simulaneiously, the Commssion issued a Concept Release that would allow U.S. issuers to drop GAAP and use Interantional Financial Reporting Standards.  The implications of these...

Institutional investors must ask hedge funds how they are assessing counterparty risk and what that means in terms of collateral management.

1. Plan sponsors should take a leadership role in promoting best practices and good pension governance. 2. Pension fiduciaries should embrace accountability and transparency. 3. Arguments against excessive government regulation apply today as well as they did fifty years ago when Atlas Shrugged was...

1. Many financial institutions are reporting losses related to valuation problems. 2. Institutional investors are on the hook to properly vet external asset managers. This includes asking tough questions about their valuation processes.

1. Pension fiduciaries must ask tough questions about a hedge fund's valuation policies and procedures. 2. There are many "tricks" that can be played when reporting valuations of "hard-to-value" instruments.

1. Pension fiduciaries must understand how their external asset managers value "hard-to-value" assets. 2. Fiduciaries could face personal and professional liability for failing to do proper oversight of external money managers with respect to asset valuation. 3. Model risk is real and must be addressed...

1. Defined benefit plan sponsors could be seriously impacted by the sub-prime crisis, possibly triggering a funding status violation. 2. For those companies directly involved in poor credit risk assessment, defined contribution plan fiduciaries are assessing whether company stock in the 401(k) plan...

1. Asset managers and plan sponsors alike should have a vested interest in valuation best practices. 2. Poor valuation process adversely impacts nearly every element of investment management, including hedge size, portfolio re-balancing, performance reports and the ability to attract and retain institutional...

Internationalization of business and capital markets has resulted in an economic environment that would be improved by uniform procedures for financial statement preparation. This would benefit investors, lenders, financial analysts, accountants, and auditors. The IASB has developed International Financial...