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Code of Federal Regulations Title 17. Commodity and Securities Exchanges § 17.270.2a41–1 Valuation of standby commitments by registered investment companies

Current as of January 02, 2025 | Updated by Findlaw Staff

(a) A standby commitment means a right to sell a specified underlying security or securities within a specified period of time and at an exercise price equal to the amortized cost of the underlying security or securities plus accrued interest, if any, at the time of exercise, that may be sold, transferred or assigned only with the underlying security or securities. A standby commitment entitles the holder to receive same day settlement, and will be considered to be from the party to whom the investment company will look for payment of the exercise price. A standby commitment may be assigned a fair value of zero, Provided, That:

(1) The standby commitment is not used to affect the company's valuation of the security or securities underlying the standby commitment;  and

(2) Any consideration paid by the company for the standby commitment, whether paid in cash or by paying a premium for the underlying security or securities, is accounted for by the company as unrealized depreciation until the standby commitment is exercised or expires.

(b) [Reserved]

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Cite this article: FindLaw.com - Code of Federal Regulations Title 17. Commodity and Securities Exchanges § 17.270.2a41–1 Valuation of standby commitments by registered investment companies - last updated January 02, 2025 | https://codes.findlaw.com/cfr/title-17-commodity-and-securities-exchanges/cfr-sect-17-270-2a41-1/

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