Reuters has added a fair value pricing model to its DataScope Pricing and Reference Data evaluated pricing service.
The fair value model, which it adopted from Investment Technology, provides mutual funds with international holdings, a tool to assist in valuations of foreign securities.
Fair value pricing is recommended by the Securities and Exchange Commission (SEC) to help mutual funds ensure that security prices reflect significant events occurring after prices are determined but before net asset value (NAV) is calculated. It is meant to reduce the opportunities for market timing by generating price adjustments that better approximate the fair value of individual holdings at the time of valuation.
The ITG Fair Value Model uses relevant information captured between the time of foreign market closures and the US market close to create fair value adjustment coefficients for over 49,000 stocks in 49 markets outside the U.S. Reuters will apply the adjustment factor to the Reuters Closing price to generate the Reuters – ITG Fair Value Pricing Service.
The combination of ITGs Fair Value Model data with Reuters DataScope Pricing and Reference Data will help subscribing firms address both regulatory compliance and market timing issues by providing an easily accessible way to establish fair value prices, said Ian Domowitz, Managing Director, ITG and CEO, ITG Solutions Network.