28 MAR 2018
Valuations underpin nearly every financial decision in the global marketplace – from home mortgages and investments to corporate finance transactions, assessment of company accounts and stock exchange listings.
As high-quality valuation is an important underpinning of the global economy, it is essential that the profession maintains public confidence in this high-risk area of surveying practice. Through valuer registration (VR), RICS supports the valuation profession in achieving this.
On his recent trip to the Middle East, we caught up with Luay Al-Khatib, Regulation Director EMEA, to find out what’s been happening since we extended Valuer Registration across the region in 2016. He has more than 17 years of experience in standards setting for real estate and construction, and currently, his role is to lead RICS’ regulatory operation, regulatory policy development for EMEA Region, and to ensure RICS’ regulatory governance is watertight.
It’s good to see that there is a concerted move across the region towards embracing International Valuation Standards, and the profession is also having to mature quickly as the awareness of its importance grows. Our recent findings from the round of VR reviews showed that the Middle East was consistent with similar developing markets. The reviews principally relate to transparency in reporting, controls within firms around competence and independence, and poor record keeping.
It is also vital to ensure that this profession is committed not just to talking about international standards but also to implement them. Valuer registration is a way of ensuring that we can support valuers in this while allowing them to demonstrate that they are committed to deliver to the global standard. The program is now mandatory in 30 countries, and there are 120 registered valuers in the Middle East. Globally, over 95% of those who are reviewed by us tell us the audit was of use to the firm in managing risks.
Risk assessment work is regularly undertaken to establish the most significant actual or potential risks to the profession’s reputation. Recently, we researched with Ipsos MORI to look at attitudes towards the profession. Based on this and other work, the principal issues that we need to address are:
We are investing heavily in our regulation function, and that involves both; additional specialist VR audit resource in this region and a stronger team to deliver regulatory assurance audit across other parts of the profession, beyond valuation. We plan on increasing the work we do with regulated firms to implement our standards. Also, currently we are consulting globally on strengthening our firm regulation model and would welcome responses from this region.
We are working with several governments in the Middle East as they develop their national regulatory frameworks and during this visit, we had the opportunity to support the Dubai and Abu Dhabi governments as they plan their regulatory models. We also got a clearer understanding of the kind of support needed among members for RICS standards and a better insight into the risks and issues in this region. This insight will help us plan on how to move forward accordingly. The valuation profession in this region has to mature quickly, and there is a concerted move, supported by authoritative bodies, towards embracing International Valuation Standards (IVS). The governments are now taking a real interest in developing an effective regulatory model that supports the valuation profession.
To find out more about RICS regulation please visit www.rics.org/regulation