SEC seeks standardisation of estate valuation in the capital market

The Securities and Exchange Commission (SEC) says there is an urgent need for standardisation of estate valuation in the capital market to avoid difference in valuation of same properties.

The Commssion also charged estate surveyors and valuers under the aegis of the Association of Capital Market Valuers (ACMV) to ensure accurate, transparent and fair estimation of value at all times to boost confidence and trust of investors and stakeholders in the market, as well as an acceptable benchmark for measuring performance.

Lamido Yugada, the director general of SEC, who was represented by Briggs Abel, Head, Investment Funds Supervision at SEC, made this known at a workshop with the theme, ‘Assets Valuation as an Economic Tool for Decision Making in the Capital Market’ organised by ACMV and SEC in Abuja on Tuesday.

Chudi Ubosi, chairman, ACMV, explained that the association was aimed at filling the void in the capital market operations. According to him, estate surveyors and valuers offer a wide range of services that add value to the market which is unknown to many.

“The essence of the workshop is to highlight the services members of the association provide to the public and accelerate use of the services among people who want to go into the market and require assets valuations such as estate valuation, intellectual properties, business valuation, among others,” Ubosi explained.

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The DG, however, expressed concerns that valuers were, in most cases, influenced by the whims and caprices of their principal as against the interest of the investor and the market, coupled with the widespread disparity in valuation of same asset by different valuers. These, according to him, impedes on the integrity and outcome of valuers activities and the capital market as a whole.

“The beauty of establishing this association out of the larger institution, is that it presents an opportunity to undertake specific professionalism. The grouping as an association of capital market valuers has the ability of setting relevant proffesional standards , codes of ethics and job prescription that will enhance the quality of its engagement and to which every member will be bound.

“The provision of this service, therefore, galvanises trust and confidence in the integrity of related transaction and is without doubt a direct positive consequences of the critical role of asset valuation for the proper working of the capital market specifically. The essence of valuation in the market cannot be over-emphasized.

“Allow me to congratulate you on the establishment as a subsidiary. We at the commission believe that this is a step in the right direction; we are confident that it will enhance focus, professionalism, trust and confidence of stakeholders,” he said.

The DG noted that the association may, in the future, stand eligible to be recognised as a self-regulatory organisation with attendant delegates powers and responsibilities.

“This status, when attained, will enhance the quality of valuation prices and engender approved public perception and user-confidence in the association and its members. The commission will support the development of functions specific standards and codes to boost your activities as valuers,”he assured.

David Maseli, Principal Partner D’Lord, Maseli and Partners, said the role of the association was key in the capital market even as more products were coming into the market . “This association is important; there must be standards, control and a way we do things.

“Market valuation is key in the marketplace and the economy. If only the people in authority understand what capital market can do, that’s where we have the long term funds to actually develop the economy,” he added.

He noted that the capital market which is funded form pension fund assets amounted to N16 trillion which is currently lying idle , adding that the funds could be used to finance critical infrastructure.