MCA issues Companies (Registered Valuers and Valuation) Rules, 2017 and notifies commencement of Section 247 [Valuation by Registered Valuers] of the Companies Act, 2013 w.e.f. 18 October 2017. The purpose to issue the Rules is to provide registration of valuers for the valuation under the Companies Act, 2013.
Companies (Registered Valuers & Valuation) Rules 2017 has defined various terms like registered valuer, assets class, certificate for recognition and registration, partnership entity, etc.. The rules further outline the required qualification, experience, conditions and other eligibility criteria for the registration of valuers.
The rules further direct Registered Valuers to be the members of the Registered Valuers Organisations (RVOs), recognised by the authority under the Rules. The eligibility norms for RVOs includes internal governance structure which provides enforcement of a code of conduct on the registered valuers, training and conduct of educational courses for the valuation of specific asset classes for which the RVO concerned is recognised. The rules contain the application and conditions for the recognition of the RVO.
Chapter 4 of the Rules specifies about Cancellation or suspension of certificate of registration or recognition. The Rules have empowered the director of company or partner of a partnership entity to file a complaint against the registered valuer or RVO before the authority accordingly the authority may refer the complaint to the relevant registered valuers organisation and such organisation will handle the complaint in accordance with its bye laws. The procedure for cancellation or suspension of registration or recognition certificate has been prescribed in the Rules.
The rules also state about the punishment for the contravention wherein if any report, certificate or other document are false or omits any material fact then the register valuer would be liable under Sec. 448 of the Act.
The Rules states transition period upto 31st March, 2018 for registration of valuers with the authority keeping in view the period which would be required by the valuers organisations and the valuers to fulfil the requirements under the law. During this transition period any person who may be rendering valuation services under the Companies Act, 2013 may continue to render such services without getting registered under the Rules.
The rules contain the valuation standards which would be modified (from time to time) on the recommendations of the Committee which comprises of the Chairman along with one member of MCA, IBBI, Legislative Department, 4 members who are representatives of registered valuers organisations, nominated by Central Government and two members to represent industry and other stakeholder. The tenure of the Chairman and member would be of 3 years and which would not extend to more than 2 tenures.