Common use of Valuation Reserves Clause in Contracts

Valuation Reserves. Market valuation reserves represent adjustments to estimates of value in order to arrive at an amount that reflects fair market value. Reserves may be required for positions in illiquid markets or for cases where subjective estimates are required. In such cases an appropriate valuation reserve will be made considering bid/ask spreads in nearby markets, the number of players in a given market, etc. Valuation reserves may also be required for complex transactions to consider fully the future costs required in fulfilling the obligations of the transaction. A form of valuation reserve is the Credit Reserve which is intended to provide a cushion to protect against losses that may be incurred from the insolvency or default of a trading counterparty. Refer to Xxxxxxx’x Credit Policy and related documentation for more information. The establishment of valuation reserves will be determined by the Chief Risk Officer in conjunction with the Chief Operating Officer / Chief Financial Officer.