The Authorised Unit Trust Scheme (Pricing of Units and Dealings by Trustee and Manager) Regulations 1988

Bases of valuation

5.—(1) A valuation carried out in accordance with regulation 3 shall be in two parts, one on an offer basis and the other on a bid basis.

(2) For each basis of valuation, cash and amounts held on a current or deposit account shall be taken at their nominal value.

(3) For the purposes of regulation 4(1)(d)(vii), the value of an option written for the scheme on property of any description shall—

(a) for that part of the valuation which is on an offer basis, be the amount of premium which would be received if an option of that kind on property of that description were written on the best terms then available on an approved options and futures market on which such options are traded less an estimated amount of such fiscal charges, commission and other charges as would be payable by the writer of such an option, calculated on the basis that the commission and charges payable were the least that could reasonably be expected to be paid in connection with the transaction; and

(b) for that part of the valuation which is on a bid basis, be the total of the amount of premium which would be paid if an option of that kind on property of that description were purchased on the best terms then available on an approved options and futures market on which such options are traded and an estimated amount of such fiscal charges, commission and other charges as would be payable by the purchaser of such an option, calculated on the basis that the commission and charges payable were the least that could reasonably be expected to be paid in connection with the transaction.

(4) The value of a margined contract, which is not a written option, shall—

(a) for that part of the valuation which is on an offer basis, be an amount, which may be a negative amount, equal to the total of the following—

(i) the amount of initial margin which would have to be deposited in order to enter into a contract of that kind on property of that description on the best terms then available on an approved options and futures market on which contracts of that kind are traded;

(ii) the amount of accrued margin which would be receivable or payable on closing out the contract and which shall be a negative amount if accrued margin would be receivable and which shall be a positive amount if accrued margin would be payable; and

(iii) an estimated amount of such fiscal charges, commission and other charges as would be payable if the contract being valued were then entered into, calculated on the basis that the commission and charges payable were the least that could reasonably be expected to be paid in order to enter into the contract; and

(b) for that part of the valuation which is on a bid basis, be whichever is applicable of the following—

(i) in a case in which margin would be receivable for the account of the scheme if the contract were to be closed out, the amount of margin which would be receivable if the contract were closed out on the best terms then available on an approved options and futures market on which contracts of that kind are traded less an estimated amount of such fiscal charges, commission and other charges as would be payable if the contract being valued were then closed out, calculated on the basis that the commission and charges payable were the least that could reasonably be expected to be paid in order to close out the contract; and

(ii) in a case in which margin would be payable out of the property of the scheme if the contract were to be closed out, a negative amount equal to the total of the amount of margin which would be payable if the contract were closed out on the best terms then available on an approved options and futures market on which contracts of that kind are traded and an estimated amount of such fiscal charges, commission and other charges as would be payable if the contract being valued were then closed out, calculated on the basis that the commission and charges payable were the least that could reasonably be expected to be paid in order to close out the contract.

(5) All other property, for that part of the valuation which is on an offer basis, shall be valued—

(a) in the case of property which is an investment of any description other than a unit in a collective investment scheme, at the market dealing offer price of that investment;

(b) in the case of property which is units in a collective investment scheme, at the price at which units of the kind in question were or would have been created following the most recent valuation of the relevant scheme, or, if—

(i) there is no such creation price for the units in question; or

(ii) the relevant creation price is higher than the issue price then being offered for deals of the relevant size; or

(iii) the manager, after making reasonable enquiries, has been unable to ascertain the relevant creation price,

at the issue price then being offered for deals of the relevant size; and

(c) if there is no price of the property in question under sub-paragraph (a) or (b) above, at a reasonable estimate of the amount which would be paid by a buyer, by way of consideration, for an immediate transfer or assignment to him at arm’s length less any fiscal charges, commission and other purchase charges which would be payable by him.

(6) All other property, for that part of the valuation which is on a bid basis, shall be valued—

(a) in the case of property which is an investment of any description other than a unit in a collective investment scheme, at the market dealing bid price of that investment;

(b) in the case of property which is units in a collective investment scheme, at the amount which would be received if units of the kind in question were offered for redemption in what, in the reasonable opinion of the manager, is a standard size; and

(c) if there is no price of the property in question under sub-paragraph (a) or (b) above, at a reasonable estimate of the amount which would be received by a seller by way of consideration for an immediate transfer or assignment from him at arm’s length less any fiscal charges, commission and other sales charges which would be payable by him.le estimate of the amount which would be received by a seller by way of consideration for an immediate transfer or assignment from him at arm’s length less any fiscal charges, commission and other sales charges which would be payable by him.