SEC sets rules for appraisal firms

The Securities and Exchange Commission had issued guidelines for the accreditation of appraisal companies to ensure that the issuance of stock in the form of property is duly evaluated by competent appraisers.

The SEC said only institutional appraisers accredited by it shall be engaged by companies accepting property as consideration for the issuance of their stocks.

Based on the proposed criteria for accreditation, the appraisal company must be registered with the SEC and licensed by the Department of Trade and Industry and the Bangko Sentral ng Pilipinas.

The certifying officer of the appraisal company must be a professional appraiser duly licensed by DTI and a member of good standing of the Instittute of Philippine Real Estate Appraisers.

At the time of application, the company or its certifying appraiser must have a minimum experience of five years in the appraisal business. It must have rendered professional services to at least one commercial bank and two public companies and must have no pending civil or criminal case involving its appraisal business.

The applicant must also be solvent and in sound financial condition. Its current and solvency ratios shall be 1:1 while debt-to-equity ratio is 3:1.

Moreover, the appraiser will be required to submit a number of documents in order for its application to be processed. These include a company profile indicating the history, scope of services of the appraiser company and the bio-data of executive/certifying officers, copy of license issued by the DTI and BSP, list of present clientele, and latest audited financial statements.

The accreditation of an appraisal company shall expire after two years unless renewed before said date.

Some companies use their real estate assets to pay off debts while some use it as collateral to meet certain trust fund or capital requirements.