Response to consultation on draft regulatory technical standards on independent valuers

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Q2: Do you agree that three years is the appropriate period of time for the purposes of Article 4(5)?

We believe that three years is too long period of time and would restrict the participation of the big valuer firms which regularly conduct businesses with banks. In small markets, it is standard practice that valuers and valuation firms often cooperate with banking institutions either as associates in carrying out valuation reports for mortgage lending purposes, or as customers (depositors/lenders). Therefore, it is unavoidable that valuer would have had frequent appointments with banks and therefore they shouldn’t be excluded.

As measure to deal with these cases, we would recommend a stricter monitoring of these valuers (e.g. through RICS Valuer Registration) and a requirement to demonstrate that valuers or valuation firms have a clear policy stating the independence, objectivity, conflict of interest and disclosure of the valuation process. RICS believes that assessing how valuers manage conflicts is more important that setting an artificial date of three years. We would however recommend a one year period as the appropriate period of time for the purpose of Article 4(5).

A number of terms require further clarification to better explain what is included in ‘offered any services’ or ‘had business or other relationship with the bank’. For example whether holding an account with the bank would qualify as a ‘business relationship’ or carrying out a small number of valuations for mortgage lending purposes would be deemed as ‘offering services’.

Q3: Do you agree with the possibility to task the temporary administrator as an independent valuer, subject to the condition set forth in the above provision [art 4(6) of the draft RTS]?

Bank resolution and recovery should be carried out swiftly so that confidence in the failing institution is not damaged or lost. Preventing the temporary administrator the possibility to carry out valuation might delay the process of resolution, therefore we would advise a more flexible approach whereby administrators could be allowed if circumstances necessitate an immediate opinion on value. However, we recognise that this depends on the individual circumstances and thus it is very difficult to set out clear criteria covering all situations. Nonetheless, we agree that the temporary administrator should fulfil the criteria set forth in the draft Regulation for the independency of valuer.

Q4: Do you reckon there are other cases of where independence should be ruled out in any case?

We consider that independence should be ruled out if a valuer is not a member of and regulated by a professional body which has a clear policy of managing conflicts of interest.

Q5: Do you agree with the approach outlined in the impact assessment and more specifically, with the elements included in the assessment of costs and benefits?

We agree.

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