IVSC policy paper on global regulatory convergence

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20 Jun 2014

The International Valuation Standards Council (IVSC) has published a policy paper dealing with the role of valuation in global regulatory convergence.

The policy paper, Global Regulatory Convergence and the Valuation Profession, includes the following summary:

With many corporations and financial institutions now operating globally, convergence of the diverse systems of national regulation of the financial markets is essential for both effective regulation and to facilitate economic growth. Consistent and effective regulation is important in promoting the comparability of financial information, minimising the effects of systemic economic risks, and helping to create a level playing field for international competition. For the valuation profession, regulatory convergence includes the global adoption and implementation of high-quality internationally accepted standards for the undertaking and reporting of those valuations that are relied upon by investors and regulators of the global financial markets.

The paper outlines:

  • the role of valuation in meeting the public interest in areas such as financial reporting, solvency of financial institutions, lending and investment decisions and unit pricing of collective investment schemes, noting that a 'one size fits all' approach may not always be suitable
  • an overview of how the valuation profession can contribute to global regulatory convergence through standards development, promoting consistent adoption and implementation, and developing regulatory arrangements
  • the key benefits of global regulatory convergence, including the comparability of financial information, improving the auditability of financial statements, reducing the effects of systemic risks, reducing information costs, decreasing opportunities for regulatory arbitrage, underpinning the global regulatory system, and providing benefits to developing and emerging economies
  • impediments and challenges to achieving global regulatory convergence
  • the role and work of the IVSC, including the setting of valuation standards and professional standards for valuers, providing adoption and implementation support and the promotion of consistent competency and ethical standards by IVSC member bodies.

The full policy paper can be obtained from the IVSC website.

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