The Securities and Exchange Commission recently provided a long-promised and needed update, in the form of a proposed rule, to guidance on determining the fair value of securities held by registered investment companies. Although the Investment Company Act of 1940 tasks the boards of directors of these funds with determining in good faith the fair

In our previous post, we reviewed how the financial markets’ reaction to the COVID-19 pandemic requires mutual funds to review, and possibly reclassify, the liquidity of their investments. As liquidity and valuation are often two sides of the same coin, factors that may lead to reclassifying a security’s liquidity may also raise questions concerning how to value the security for purposes of calculating a mutual fund’s net asset value (“NAV”). This post discusses when this may be the case.