Federal securities regulators are looking more closely at whether U.S. mutual funds have proper procedures in place to accurately price shares of private technology companies amid signs the tech boom is wavering, the Wall Street Journal reported today. The Securities and Exchange Commission in recent months has been asking more questions of large fund firms about how they value startups and whether their process ensures an accurate estimate of a company’s worth. The SEC conducts occasional checkups of mutual funds in which they examine things such as the proportion of funds’ holdings that are in hard-to-sell securities, which include shares of private companies. The amount of hard-to-sell shares is an indicator of how easily a mutual-fund investor would be able to get his or her money back. Some SEC examiners have shifted more of their focus in those regular reviews to possible shortcomings in the startup-valuation process. Read more. (Subscription required.)
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