COLL 8.2.11 Pricing Controls of Operator—QFC Retail Schemes

(1) The operator of a QFC retail scheme must be able to demonstrate that it has effective controls over its calculations of unit prices.
(2) Without limiting subrule (1), the controls must be appropriate to ensure that—
(a) prices of units are calculated in accordance with this division; and
(b) the likelihood of incorrect prices is minimised.
(3) In particular, the controls must ensure all the following:
(a) asset prices are accurate and up-to-date;
(b) investment transactions are accurately and promptly reflected in valuations;
(c) the components of the valuation (including stock, cash, and units in issue) are regularly reconciled to their source or prime records and any reconciling items resolved promptly and debtors reviewed for recoverability;
(d) sources of prices not obtained from the main pricing source are recorded and regularly reviewed;
(e) compliance with investment and borrowing powers is regularly reviewed;
(f) dividends are accounted for as soon as securities are quoted ex-dividend (unless it is prudent to account for them on receipt);
(g) fixed interest dividends, interest and expenses are accrued at each valuation point;
(h) tax positions are regularly reviewed and adjusted, if necessary;
(i) reasonable tolerances are set for movements in the key elements of a valuation, and movements outside the tolerances are investigated;
(j) the operator regularly reviews the portfolio valuation for accuracy;
(k) valuation of OTC derivatives is accurate, up-to-date and complies with methods agreed with the independent entity.

Note OTC derivative is defined in the glossary.
(4) In exercising its pricing controls, the operator may exercise reasonable discretion in deciding the appropriate frequency of the operation of the controls and may choose a longer interval, if appropriate, given the level of activity in the scheme or the materiality of any effect on the price.
(5) The operator must keep records to demonstrate the exercise of effective pricing controls.
Derived from QFCRA RM/2010-05 (as from 1st January 2011)