How to become a Registered Valuer?

How to become a Registered Valuer?

The Central Government, vide a notification dated 23rd October, 2017, issued the Companies (Removal of Difficulties) Second Order, 2017 to provide that valuations required under the Companies Act, 2013 shall be undertaken by a person who, having the necessary qualifications and experience, and being a valuer member of a recognised valuer organisation, is registered as a valuer with the Authority. Vide another notification on the same date, the Central Government delegated its powers and functions under section 247 of the Companies Act, 2013 to the Insolvency and Bankruptcy Board of India (IBBI) and specified the IBBI as the Authority under the Companies (Registered Valuers and Valuation) Rules, 2017.

The Companies (Registered Valuers and Valuation) Rules, 2017, as amended, require that only a person registered with the IBBI as a registered valuer can conduct valuations required under the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016 with effect from 1st February, 2019. A person, who is rendering valuation services under the Companies Act, 2013, may continue to do so without a certificate of registration up to 31st January, 2019.

To know more background on Registered Valuer and related laws, click here.

There are three categories of Registered Valuer on the basis of Assets Class:

  1. Land & Building Valuer
  2.  Plant & Machinery Valuer
  3. Securities or Financial Assets Valuer

Step-I: Qualification and Experience

As per rule 4 read with Annexure-IV of  the Companies (Registered Valuers and Valuation) Rules, 2017, an individual shall have the following qualifications and experience to be eligible for registration as Registered Valuer:

In short:

  1. Graduate + 5 years post qualification experience, or
  2. Post Graduate + 3 years post qualification experience, or
  3. Membership of a professional institute + 3 years post qualification experience.

Details qualifications and experience criteria as under:

 
Asset Class Qualifications Experience in specified Qualifications discipline.
Plant and Machinery (i) Graduate in Mechanical, Electrical, Electronic and Communication, Electronic and Instrumentation, Production, Chemical, Textiles, Leather, Metallurgy, or Aeronautical Engineering, or Graduate in Valuation of Plant and Machinery or equivalent; Five Years
(ii) Post Graduate on above courses. Three years
     
Land and Building (i) Graduate in Civil Engineering, Architecture, or Town Planning or equivalent; Five years
(ii) Post Graduate on above courses and also in valuation of land and building or Real Estate Valuation (a two-year full time post-graduation course) Three years.
     
Securities or Financial Assets (i) Member of Institute of Chartered Accountants of India, Member of Institute of Company Secretaries of India, Member of the Institute of Cost Accountants of India, Master of Business Administration or Post Graduate Diploma in Business Management (specialisation in finance). Three years
(ii) Post Graduate in Finance
Note: Any other asset class along with corresponding qualifications and experience in accordance with rule 4 as may be specified by the Central Government.

Other eligibility criteria as under:

  1. is not a minor;
  2. has not been declared to be of unsound mind;
  3. is not an undischarged bankrupt, or has not applied to be adjudicated as a bankrupt;
  4. is a person resident in India;
    Explanation.─ For the purposes of these rules ‘person resident in India’ shall have the same meaning as defined in clause (v) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999) as far as it is applicable to an individual;
  5. has not been convicted by any competent court for an offence punishable with imprisonment for a term exceeding six months or for an offence involving moral turpitude, and a period of five years has not elapsed from the date of expiry of the sentence:
    Provided that if a person has been convicted of any offence and sentenced in respect thereof to imprisonment for a period of seven years or more, he shall not be eligible to be registered;
  6. has not been levied a penalty under section 271J of Income-tax Act, 1961 (43 of 1961) and time limit for filing appeal before Commissioner of Income-tax (Appeals) or Income-tax Appellate Tribunal, as the case may be has expired, or such penalty has been confirmed by Income-tax Appellate Tribunal, and five years have not elapsed after levy of such penalty; and
  7. is a fit and proper person:
    Explanation.─ For determining whether an individual is a fit and proper person under these rules, the authority may take account of any relevant consideration, including but not limited to the following criteria-
    (i) integrity, reputation and character,
    (ii) absence of convictions and restraint orders, and
    (iii) competence and financial solvency.

Step-II Enrollment with a Registered Valuer Organisation (RVO)

A person possess qualifications as described under step-I, seek enrollment as a valuer member of a RVO recognized by the IBBI. Assets class wise RVOs list as under(recongised till 15.09.2019):

Name of RVO Website of RVO Asset Class
P&M L&B S/FA
Institution of Estate Managers and Appraisers www.iesmarvo.net Yes Yes Yes
IOV Registered Valuers Foundation www.iovrvf.org Yes Yes Yes
ICSI Registered Valuers Organisation www.icsirvo.in Yes Yes Yes
The Indian Institution of Valuers www.iivrvo.org Yes Yes Yes
ICMAI Registered Valuers Organisation www.rvoicmai.in Yes Yes Yes
ICAI Registered Valuers Organisation www.icairvo.in No No Yes
PVAI Valuation Professional Organisation www.pvaivpo.org Yes Yes Yes
CVSRTA Registered Valuers Association www.cvsrtarva.org Yes Yes Yes
Association of Certified Valuators and Analysts www.acvaindia.org No No Yes
CEV Integral Appraisers Foundation www.ceviaf.org Yes Yes Yes
Divya Jyoti Foundation www.djfrvo.org Yes Yes Yes

How to Enroll, go to RVO website and follow instructions provided on the website.

Step-III: Educational course

After enrolment, as a member of a RVO, complete the educational course recognised by the IBBI. 

The syllabus, format and frequency of the valuation examination, including qualifying marks, shall be published on the website of IBBI at least three months before the examination. An individual may appear for the valuation examination any number of times. An individual who passes the valuation examination, shall receive acknowledgement of passing the examination.

Step-IV: Syllabus & Valuation Examination

Register and pass the computer based Valuation Examination of the relevant Asset Class conducted by the IBBI. Asset class wise syllabus of valuation examination as under:

Land & Building and Plant & Machinery Valuation examination Syllabus w.e.f. 01.04.2019 as under:

Syllabus Land and Building Plant and Machinery
A. Common Syllabus: Weight(%) Weight(%)
Principles of Economics 10 10
Book Keeping and Accountancy 3 3
Law – General 12 12
Introduction to Statistics 2 2
Environmental Issues in Valuation 4 4
Professional Ethics and Standards 2 2
Important Case Laws on principles of valuation of releted sector 2 1
Principles of Insurance and Loss Assessment 4 4
Report writing 3 3
Case Study 8 8
Total common syllabus weight(A) 50 49
B. Class specific Syllabus:    
Law-Real Estate 8  
Valuation of Real Estate 14  
Income Approach to Value 8  
Market Approach to Value 8  
Cost Approach to Value 8  
Various purposes of Valuation 4  
     
Valuation of P&M   6
Identification and Physical Verification of Plant, Machinery and Equipment (PME)   7
Income Approach to Value   2
Market Approach to Value   2
Cost Approach to Value   6
Process of Valuation   3
Broad categories of machines to be encountered by P&M valuers in actual practice   2
Leasing of P&M   2
Valuation of P&M for M&A etc. purpose   6
Law – P&M    3
Machine Tools, Factory, Utility Equipment and Electrical Installations   6
Industrial Processes   6
Total specific Syllabus weight(B) 50 51
TOTAL(A+B) 100 100

Securities or Financial Assets Valuation examination Syllabus w.e.f. 01.04.2019 as under:

Syllabus Weight(%)
Macroeconomics 4
Finance and Financial Statement Analysis 6
Professional Ethics and Standards 4
General laws: 18
The Companies Act, 2013
The Indian Contract Act, 1872
The Sale of Goods Act, 1930
The Transfer of Property Act, 1882
The Indian Stamps Act, 1899
The Income Tax Act, 1961
The Insolvency and Bankruptcy Code, 2016 (IBC) and Regulations
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002)
   
Financial Reporting under Indian Accounting Standards (Ind AS) 5
Overview of Valuation 4
Valuation Approaches 3
Valuation Application: 33
Equity / Business Valuation
Fixed Income Securities
Option Valuation
Valuation of other Financial Assets and Liabilities
Intangible Assets
Situation Specific Valuation
Regulations relevant to Financial Assets Valuation(SEBI, RBI and FEMA Regulations) 4
Judicial Pronouncements on Valuation 3
Case Studies 16
TOTAL 100

For details syllabus, visit IBBI website.

Step-V: Register as Registered Valuer

Once passed the Valuation Examination, a members can apply for registration within 3 years preceding the date of making an application for registration.

Study Material:

Discipline Securities or Financial Assets Plant and Machinery Land and Building
Prepared By IOVRVF CVSRTA CVSRTA

 

FAQs

The Companies (Registered Valuers and Valuation) Rules, 2017, notified in exercise of powers conferred by section 247 read with sections 458, 459 and 469 of the Companies Act, 2013 (18 of 2013), define a Valuer and lay down rules governing a Valuer inter alia including Eligibility, Qualification and Registration of Valuer.

A Valuer is an individual (or an entity) who does the work of valuation. A registered valuer means a person registered with the Authority in accordance with the Companies (Registered Valuers and Valuation) Rules, 2017 (the Rules).

An individual, a partnership entity or a company are eligible for registration subject to meeting the eligibility requirements provided for in rule 3 of the Companies (Registered Valuers and Valuation) Rules, 2017.

For all asset classes, where the eligibility is being determined based on graduate or post-graduate level degree /diploma, obtained from a recognised university or equivalent in India or abroad, such qualification should have been obtained on pursuing a regular full time course.

Yes, since the same has been recognised by Ministry of Human Resource Development vide notification no. F. 18-20/83/T.12/T.7/T.13 dated July 11, 1988.

The following documentary proofs (as applicable) are considered for establishing educational eligibility:
(1) Final Degree Certificate, obtained from an Indian University or equivalent whether in India or aborad and / or;
(2) Certificate of Membership issued by a professional institute established by an Act of Parliament.

Is provisional Degree certificate considered for establishing educational eligibility?-No.

Is Marksheet considered for establishing educational eligibility?-No.

Will self-certification of experience by an applicant, who is not a member of a professional institute, be considered a proof of experience?-No.

Will self-certification of experience by an applicant, who is not a member of a professional institute, be considered a proof of experience if the same is given on
an Affidavit?-No.

 

List of recognised Indian Universities is listed on the website of University
Grants Commission (UGC). Link to the same (as on December 20, 2018) is as under:

https://www.ugc.ac.in/oldpdf/Consolidated%20list%20of%20All%20Universities.pdf

1. Can a Graduate in Commerce be registered as a registered valuer for asset class “Land & Building” if he has been undertaking valuation for the said asset class for more than 5 years?
Ans. No. Graduation in commerce will not satisfy the condition of specified discipline.

2. Can a Graduate in Commerce and Post Graduate in Real Estate Valuation be registered as a registered valuer for asset class “Land & Building” if, after postgraduation, the applicant has experience in valuation for the said asset class for more than 5 years?
Ans. Yes. In this case, post-graduation in real estate valuation will satisfy the condition of specified discipline. The condition of mandatory experience requirement is being satisfied in terms of number of years of experience in the specified discipline.

3. Can a Graduate in Commerce and Post Graduate in Real Estate Valuation be registered as a registered valuer for asset class “Land & Building” if he has been undertaking valuation for the said asset class for more than 5 years post completion of Graduation?
Ans. No. In this case, the education eligibility is established from Post-Graduation in Real Estate Valuation. The experience is with regard to a prior period and not after completion of the said course.

4. Can a Master of Commerce with specialisation in Finance be registered as a valuer for asset class “Securities and Financial Assets” if he has been undertaking
valuation for the said asset class for more than 5 years?

Ans. No. The applicant should be a Post Graduate in Finance. In the current case, the applicant is a Post Graduate in Commerce.

5. Can a Post Graduate in Real Estate Valuation be registered as a registered valuer for asset class “Plant & Machinery” if he has been undertaking valuation for the said asset class for more than 5 years?
Ans. No. Post-graduation in real estate valuation will not satisfy the condition of
specified discipline for the said asset class.

6. Can a BE (Mechanical) applicant be registered as a registered valuer for asset class “Plant & Machinery” if he has been undertaking valuation for the said asset class for more than 3 years?
Ans. No. While the education requirement is being met, the mandatory experience requirement is not met i.e., minimum 5 years after securing graduation in the specified discipline.

7. Can a BE (Electrical) applicant be registered as a registered valuer for asset class “Plant & Machinery” if he has been undertaking valuation for the said asset class for more than 5 years prior to completion of the course?
Ans. No. The minimum experience in specified discipline must pertain to the period after completion of the qualifying degree.

8. Can a B. Arch applicant be registered as a registered valuer for asset class “Land  and Building” if he has been undertaking valuation for the said asset class for more than 5 years?
Ans. Yes. In this case, both education and minimum experience in specified discipline are being met. This is subject to the condition that the experience pertains to the period after completion of the qualifying education qualification, in this case B. Arch.

9. If an applicant holds BE (Civil) and Post Graduate Degree in Valuation of Plant
& Machinery and has more than 5 years’ experience in valuation of “Land & Building” pursuant to graduation and 5 years’ experience in valuation of “Plant & Machinery” pursuant to post graduation, can the applicant be registered as a registered valuer for both asset class “Land and Building” and “Plant & Machinery”?
Ans. Yes. In this case, the applicant has relevant experience in respective specified discipline and has acquired the experience after attainment of respective educational qualification in the specified discipline.

10. Can a Chartered Accountant with more than 3 years of experience in valuation of financial securities be considered for registration as registered valuer for asset  class “Securities or Financial Assets” if the applicant has not undertaken Graduation?
Ans. Yes.

11. Can a Chartered Accountant with more than 3 years of experience in valuation of financial securities be considered for registration as registered valuer for asset class “Securities or Financial Assets” if the applicant is a Graduate in Civil Engineering?
Ans. Yes.

12. Can an individual possessing MBA in any discipline be eligible to seek registration for asset class “Securities and Financial Assets”?
Ans. Only applicants with specialisation in Finance will be eligible for registration as valuer.

13. Can an individual possessing MBA (Finance) from a foreign university seek registration for asset class “Securities and Financial Assets”?
Ans. Yes. The qualifying degree should have been obtained from a recognised Indian University or equivalent whether in India or abroad. In case the qualifying degree has been attained from abroad, the same should be recognised in India.

14. Which all foreign universities and foreign degrees are considered eligible as qualifying educational qualification?
Ans. The Ministry of Human Resource Development (MHRD), Government of India (GOI) vide their letter No. F.15-17/94-TS IV dated March 13, 1995 issued a notification that those foreign qualifications which are recognized/equated by Association of Indian Universities (AIU), are treated as recognized for the purpose of employment.
Accordingly, an applicant with a foreign degree must enclose Equivalence Certificate issued by AIU with respect to the foreign degree based on which registration is being sought. Link to AIU website is as under: www.aiu.ac.in

1. Is 50 hours training mandatory for a person who is already undertaking valuation for Banks / Institutions / under IT Act etc?
Ans. Yes. The training is mandatory.

2. Who gives the 50 hours mandatory training?
Ans. Training is scheduled by RVOs. For exact schedule of training, the applicant
should contact respective RVO.

3. In case a Registered Valuer for one asset class is eligible for registration for another asset class, will 50 hours training be required to be undertaken again?
Ans. Yes, since the training is asset class specific.

4. Can an employed individual undertake 50 hours mandatory training?
Ans. Yes. However, an individual shall not be in employment at the time of applying for registration as valuer.

5. Are applicants above a certain age threshold exempted from appearing for training?
Ans. No, 50 hours training for respective asset class is mandatory for all applicants, irrespective of their age, intending to seek registration.

1. Is passing of Valuation exam mandatory?
Ans. Yes.

2. Is the examination conducted online or offline?
Ans. Examinations are conducted in online mode only.

3. Within how many days of passing the valuation exam, should Form A be filled?
Ans. Valuation Examination result is valid for 3 years from the date of passing of
exam.

4. Are applicants above a certain age threshold exempted from passing Valuation examination?
Ans. No, passing of examination is mandatory for all applicants seeking registration irrespective of the age of applicant.

5. If a Valuer Member has passed the valuation exam but is yet to receive Valuation Examination passing certificate, is he/she required to wait for the Certificate for applying for registration?
Ans. No. In such cases, printout of result received after online examination can be enclosed as proof of passing of examination.

6. Where can I get more information on Syllabus, Valuation examination etc?
Ans. Details with regard to Valuation Examination, including Asset class wise Syllabus, can be accessed at https://ibbi.gov.in/ValuationExamination.html

7. Are applicants above a certain age threshold exempted from appearing for valuation examination if they have undertaken 50 hours training?
Ans. No. No one is exempted from appearing for the valuation examination.

With effect from February 01, 2019, only registered valuers can undertake valuation under (i) the Companies Act, 2013 and (ii) the Insolvency and Bankruptcy Code, 2016. However, any (registered or unregistered) person may continue to render valuation services under any other law which has not stipulated requirement for valuation to be undertaken by a registered valuer.

The conduct of valuation under any other law by any person shall not be affected
by virtue of coming into effect of the rules with respect to registered valuers.
However, with effect from February 01, 2019, only registered valuers can undertake valuation under (i) the Companies Act, 2013 and (ii) the Insolvency and Bankruptcy Code, 2016.

A registered valuer can undertake valuation of assets only for the class of asset
for which he/she is registered for.

Yes, subject to having the qualification and experience provided in the Companies (Registered Valuers and Valuation) Rules, 2017 for each asset class and you have passed the valuation examination for each asset class.

An individual can be a member of only one RVO for a particular asset class.
However, for other asset class, an individual can be a member with another RVO if the existing RVO is not recognised to accept members in the asset class for which membership is being sought.

Yes, with the prior written permission of IBBI, a registered valuer can shift his membership from one RVO to another.

No, at the time of applying for registration, an applicant must not be in employment. In effect, while a person in employment can appear for the valuation examination, such person shall not be in employment at the time of seeking registration as a valuer.

A partnership entity or a company can be registered as valuer if they have been set up with the objects of rendering professional or financial services including valuation services. In case of Company, it should not be a subsidiary, joint venture or associate of another company or body corporate.

Yes, all partners or directors should have passed the valuation examination under rule 5 within three years preceding the date of making an application for registration
under rule 6.

Three or all the partners or directors, whichever is lower, of the partnership firm or company, as the case may be, need to be registered valuers with atleast one of the partner or director being a registered valuer for the same asset class for which registration is being sought by the partnership firm or company.

No, a partnership firm or a company needs to have at-least one partner in the asset class ‘Land and Building’ to be granted registration as a registered valuer in the asset class of ‘Land and Building’.

No. Only a partnership entity registered under the India Partnership Act, 1932 or a limited liability partnership registered under the Limited Liability Partnership Act, 2008 can be registered as a Valuer.

Yes, subject to meeting the conditions stated for the asset class for which registration is being sought by the partnership firm or company.

Leave a Reply

WhatsApp Bulletin-XIV