IOSCO and IVSC agree to explore best ways to promote high quality valuation practices in the public interest.
Cooperation agreement follows feedback from securities regulators highlighting inconsistency in valuation quality and approach, worldwide
London, UK, 20 October 2022 – International Organization of Securities Commissions (“IOSCO”), the global standard setter for securities regulation, and the International Valuation Standards Council (“IVSC“), a global organisation responsible for setting the International Valuation Standards, have today entered into a Statement of Cooperation aimed at developing a better understanding of the quality and consistency of valuations and the professional standards employed by valuers internationally, with the objective of mitigating risks to the quality of financial information for the protection of investors and for the stability of the financial system.
The Statement of Cooperation, signed by IOSCO Board Chair and CEO of Securities and Futures Commission of Hong Kong, Ashley Alder, and IVSC Chair, Alistair Darling, outlines steps both organisations will take to enhance their cooperation and build mutual understanding of the landscape surrounding the valuation profession and standard-setting process, including governance, due process and credentialing. It follows a roundtable meeting earlier this year, during which senior leaders of standard-setting, regulatory, audit, investor and valuation organisations encouraged IVSC and IOSCO to work together to improve the quality and consistency of valuations across international markets.
”IVSC and IOSCO share the mutual goal of improving the financial information that regulators and market participants rely on. Our Statement of Cooperation with IOSCO highlights the importance of valuation in financial stability and will further advance international valuation standards and professionalism, globally.Alistair DarlingChair of the IVSC Board of Trustees
”Valuations are an important component of sound capital markets, but valuers are regularly not overseen by securities regulators. As a first step, IOSCO intends to deepen its understanding of current issues and standards within this area by engaging closely with the IVSC to understand their standards and standard-setting process.Ashley AlderChair (2016-2022), IOSCO
Valuations are an important component of the financial reporting system. Professional quality valuations, informed through transparent and consistently applied international valuation standards, can help to mitigate risks to investors and to the stability of the financial system as a whole.
Despite a growing acceptance of the important role valuations play in stable financial markets, quality and consistency in approach can vary significantly throughout the world today. In a recent survey of its members undertaken by IOSCO, national securities regulators reported a divergence in the quality and approach to valuation from country to country.
The Statement of Cooperation formalises the ongoing collaboration between both organisations. The agreement encompasses knowledge sharing and proactive support in areas including approach to standard-setting, governance and monitoring, as well as emerging valuation risks and identifying further actions for consideration by the securities regulators.
”The Statement of Cooperation between IOSCO and IVSC is an important acknowledgement of the role international valuation standards and professionalism can play in promoting a transparent and stable financial system.Kathleen CaseyFormer SEC Commissioner
”Enhanced cooperation between IOSCO and IVSC serves the public interest. Financial statements increasingly depend on valuations, and inconsistent approaches pose significant challenges for auditors, as well as stakeholders. Valuations based upon a common platform of high-quality global standards, developed in close connection with global market regulators, should aid auditors in performing their engagements and ultimately improve trust in reported information.Tom SeidensteinChair, International Auditing and Assurance Standards Board (IAASB)
”IOSCO and IVSC are focused on developing, implementing and promoting adherence to internationally recognised standards. This cooperation agreement is an important milestone in our efforts to ensure valuation standards are consistent across international markets.Japheth KattoFormer CEO, Capital Markets Authority of Uganda & current IVSC Trustee