By Mr. Vinay K Goel
Hon. General Secretary, Institution of Valuers (IOV)
MD & CEO, IOV-Registered Valuers Foundation (IOV-RVF)
Congratulations to all Registered Valuers and aspirants who are entering into a new era of Valuation as a profession with renewed energies, knowledge and updated information.
A market economy needs valuations of assets to facilitate a variety of transactions under different statutes and authorities in India. For different purposes, there is a prescribed manner of valuation. A valuer thus has an important responsibility and must possess the required capability and integrity for the job.
This calls for an institutional framework for regulation and development of profession of valuers, which has taken the shape with the notification of the Section 247 of the Companies Act, 2013. Section 247 of the Act, 2013 and the Companies (Registered Valuers & Valuation) Rules, 2017 provides for education, training and certification of valuation professionals.
Further, to enhance the competency of the valuers, Registered Valuer Organizations (RVOs) have been entrusted with the following responsibilities by Insolvency & Bankruptcy Board of India (IBBI):
- Conduct educational courses and practical training of 50 hrs. for individuals who possess the qualifications and experience as specified in the Rules, in accordance with syllabus determined by the authority to test their professional knowledge, skills values and ethics in respect of valuation.
- Conduct training for the Valuer Members before issuing Certificate of Practice (COP).
- Provide for Continuing Education Programme (CEP) to Registered Valuers.
In accordance, RVOs have to monitor the professional activities and conduct of members for their adherence to the provisions of the Act, rules, regulations and guidelines issued there under and the bye-laws, the Code of Conduct and directions given by the Governing Board as per their monitoring policy. The Monitoring Committee of the RVO shall review the information and records submitted by the members in accordance with the Monitoring Policy and guide the valuer members in exercising the professional dispensations.
RVOs are tasked with keeping abreast with the changes in regulation, codes and monitoring their valuer member’s conduct to encourage and enforce conformity, sound professional and ethical practices. In pursuance of monitoring objectives, RVOs are supposed to undertake monitoring visits to its Registered Valuer Members for inspection of their information and records and to review of compliance of obligations under the Act & Rules.
The frequency of such visits will be determined using a risk-based approach and will have regard to the following:
- Review of the information/documents received from the registered valuer members;
- Any information received from other stakeholders and regulators;
- Any information received from the third-party resources
On completion of a monitoring visit to the registered valuer member, the Monitoring Team shall submit its report setting out the scope of the monitoring visit, the extent to which the registered valuer member complies with the terms of reference of team and relevant law and practice and other legislation, the extent to which professional competence has been tested and achieved.
The Registered Valuer shall have to maintain written contemporaneous records for any decision taken, the reason for taking the decision and the information and evidence in support of such decision in a manner that a reasonable person can a take a view on the appropriateness of the decisions and actions. The Registered Valuer while respecting the confidentiality of information acquired during the performing professional services shall maintain proper working papers for a period of three years or such longer period as required in its contract for a specific valuation.
Since, valuation is a legal and financial requirement and it requires a registered valuer to act in the best interest of the stakeholders. RVOs have been entrusted with the responsibility to ensure that the aims and principles of ethical standards, such as integrity, objectivity, truthfulness and avoidance of conflicts of interest are followed by the Valuers in good spirit and in the interest of the Fair Valuation.
