SEC Calls for Urgent Standardisation of Estate Valuation

Bennett Oghifo

The Securities and Exchange Commission (SEC) has called for an urgent standardisation of the value of every piece of real estate in the capital market to prevent different values being presented for one property.

The Director General of SEC, Lamido Yugada gave the advice at a workshop organised in Abuja recently by the Association of Capital Market Valuers (ACMV), an arm of the Nigerian Institution of Estate Surveyors and Valuers, and SEC with the theme, ‘Assets Valuation as an Economic Tool for Decision Making in the Capital Market’.

The SEC Director General, who was represented by the Head, Investment Funds Supervision, Briggs Abel, also urged ACMV members “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.”

He said estate valuers were often influenced by their principals “against the interest of the investor and the market, coupled with the widespread disparity in valuation of the same asset by different valuers. 

This, he said, reflected badly 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 transactions and is without doubt a direct positive consequence 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 Director General  noted that the association may, in the future, stand eligible to be recognised as a self-regulatory organisation with attendant delegates powers and responsibilities.

He said, “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.

According to the Chairman of ACMV, Chudi Ubosi, the association’s aim is to fill the void in the capital market operations, adding that estate surveyors and valuers offered a wide range of services that add value to the market, unknown to many people.

Ubosi said, “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 asset valuations such as estate valuation, intellectual properties,  business valuation, among others.” 

The Principal Partner D’Lord, Maseli and Partners, David Maseli, 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.

The Capital Market, which is funded from the Pension Fund Assets, amounted to N16 trillion, currently lying idle, Maseli said, adding that the funds could be used to finance critical infrastructure.