Capelogic Launches Fair Value Oversight System for SEC 38a-1 Compliance
Capelogic, a compliance software provider for the fixed-income and mutual-fund markets has launched its Fair Value Oversight System (FVOS), an Internet-based solution that uses multiple pricing sources and market data to support fair value pricing of fixed income securities held within an investment company's portfolios.
Rule 38a-1 of the Investment Company Act of 1940 states that firms must adopt policies and procedures outlining how and when securities are fair valued. Capelogic's FVOS reconciles securities held within a fund or funds on a daily basis, identifies potential outliers, advises of discrepancies and indicates corrective action taken. All portfolio holdings, their outliers and corrective actions are maintained online in a historical database that can be retrieved for auditing and reporting purposes.
"SEC Rule 38a-1, which re-emphasizes responsibility and considers fund share and portfolio security pricing as critical areas, has prompted firms to view fair-value practices for securities in a whole different light," said Randall Soderberg, president of Capelogic, in a press release.