Report of the Committee of Experts Development of Valuation Professionals
Developing the valuation profession and the market for valuation services in India
The valuation profession is very important institution for market economies. Valuation services are required for transactions under several enactments and market-based arrangements (such as mergers, acquisitions, commercial agreements, etc.). Regulating these services appropriately is crucial for ensuring standardization of practices and reducing commercial uncertainties. However, valuation professionals and the market for valuation services are largely unregulated, which creates several arbitrage opportunities.
In order to fill this lacuna, the government had constituted a committee in September, 2019 to examine the need for an institutional framework for regulation and development of the valuation profession in India. It submitted its report along with a draft bill in April, 2020.
The primary objectives of the proposed Bill are development and regulation of the valuation profession and the market for valuation services in India. It also seeks to protect the users of such services.
The Bill provides for a two-tier model for the regulatory governance of the profession. It provides for the establishment of the National Institute of Valuers (NIV) as the principle regulator, and recognition of Valuer Professional Organisations to act as frontline regulators, which shall be primarily responsible for the development of the profession. The Bill envisages specialised educational courses along-with a mandatory internship for entry into the profession. These courses are to be delivered by Valuers Institutes, registered with the NIV. The examinations for these courses are also to be conducted by NIV.