The FSA has published a letter on valuation and product control that it has sent to CEOs/those individuals responsible for the apportionment and oversight of valuation controls in respect of large and/or complex principal trading operations within banks and investment firms. The letter has two appendices which set out:
- The common drivers of recent mis-marking incidents and, to the extent that the mitigating action is not obvious, some observations about good practices that would help mitigate the risk of these incidents being repeated.
- Information about the FSA’s prudent valuation principles, including the steps it expects firms to have taken to develop systems and processes to rigorously apply these principles to their trading businesses.
View FSA Dear CEO letter - Valuation and product control, (PDF 346KB), 20 August 2008