Recall that effective 1 January 2010, GIPS (r) compliant firms must revalue portfolios for large cash flows. This may be an issue, a costly one, for fixed income managers who today only value bonds weekly or monthly. I specifically asked, during last week's GIPS conference, whether this rule will apply, and it will. While I'm not surprised, I could have seen some flexibility, given what happened with real estate last year.
Direct real estate managers now have to value quarterly. But this rule seemed to soften a bit, in that they can carry over the same value from the prior quarter ... at least that's my understanding. And so, if a fixed income manager has a policy whereby they value weekly, they may argue that the market isn't liquid and therefore the value stays roughly the same week-to-week (or at least, day-to-day); also, since many of the assets are matrix priced, they don't expect to see much of a change.
However, the word is that firms will have to revalue whenever a flow occurs; translation: figure you'll have to value daily. This means added costs. Further clarity on this may come, but I'd plan on more frequent revaluations unless we here something "official" to the contrary.