Through this offering, benefits of the clients include: more accurate asset valuation and hence a more accurate fund NAV; flexibility to design application to client specific requirements, pre-defined criteria enabling automated generation of adjusted values and process significantly automated with appropriate audit trail and reports.

BNY Mellon said that BlackRock has become the first company to adopt the new service, which is initially being introduced as a London Noon service, covering North and South America markets.

As an example, a valuation adjustment of US equity in a fund valued at 12:00 noon UK time will take into account events after the local market closure that impact the security price up to the valuation point of the fund.

According to the BNY Mellon, an ‘Evaluated Adjustment Factor’ for each individual security will be generated, which can be applied to the local closing price to adjust it for post-closing market movements.

A ‘Confidence Level’ will be provided for each security as a measure of the probability of a relationship between a given security and the factors in the models.

The service also allows for Fair Value to be invoked at the asset level per fund and can be tailored in line with individual client requirements such as fund specific markets in scope and confidence level. The flexibility of the model also allows for additional valuation points to be added subject to client need.

BlackRock head of UK Retail Tony Stenning said that BNY Mellon’s new fair value pricing offering has allowed BlackRock to replace the existing manual service and offers distinct benefits in terms of timeliness, level of detail and flexibility.

BNY Mellon Asset Servicing Head of Europe, Middle East & Africa Frank Froud said that the new service offers an on-demand, tailored approach to fair value pricing that allows the clients to benefit from an increased level of confidence via both pre- and post-NAV reporting and analysis, including back testing.

BNY Mellon said that it will be expanding the service to cover additional markets and valuation points in the coming months.