By Neil Jerome C. Morales (The
Philippine Star) | Updated October 29, 2013 - 12:00am
MANILA, Philippines - The Securities
and Exchange Commission has firmed up its new rules that will subject property
valuators to more stringent application and operational requirements.
In a memorandum, the corporate
regulator issued the final exposure draft of the Guidelines on Property
Valuations that aim to enhance the reliability and quality of property
appraisal reports.
The service of appraisal firms are
essential in the transfer of property, be it tangible or intangible, between
companies.
Specifically, the SEC said appraisal
firms should be registered in the Philippines, with its property valuers being
Filipino citizens. The real estate appraiser should also be professionally
licensed by the Professional Regulation Commission.
Under existing rules, public companies
and secondary licensees of SEC that are planning to receive or transfer
property in exchange for shares of stock are required to hire property
valuators.
With the revised rules, the SEC also
required listed firms’ subsidiaries that will receive property to hire
valuators.
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“Issuers of securities to the public
or public companies that propose to transfer their property to another entity
in exchange for shares of stock or cash or property” should also be appraised
by accredited valuers, SEC said.
Also required to tap property
appraisal firms are listed companies that plan to declare a property dividend.
The new rule comes at the heels of the
consolidation of SM Group’s leisure estate, residential and mall development
firms under SM Prime Holdings Inc.
The P279-billion transaction allowed
SM to create the largest property firm in the Philippines with a market
capitalization of $14-billion.
The corporate regulator added
operational requirements for property valuation companies.
In the appraisal reports, accredited
appraisal company and its valuers should include “the purpose of the appraisal,
the description and location of the properties, whether tangible or intangible,
and the type of business of the client company.”
Appraisal firms’ complete name and
address, including its SEC accreditation number and validity period, should
also be included in the report.
To determine compliance, SEC said it
may require an accredited appraisal company to submit a copy of any of its
appraisal reports and supporting documents.
“For this purpose, the appraisal
company shall indicate in its engagement contracts that it is obligated to
provide to the Commission said documents upon its order,” it added.
To remain as an accredited appraisal
firm, the SEC said the companies should have all the requisite business permits
and license to operate, and at least two licensed valuers and adequate number
of technical and administrative personnel for the conduct of valuation.
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