IOSCO and IVSC to collaborate on valuation

Posted on October 28, 2022 by Editor

The International Organization of Securities Commissions (IOSCO) and the International Valuation Standards Council (IVSC) have entered a cooperation agreement to explore approaches to valuation worldwide, and the quality of information available to investors.

“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,” they state.

While the role of valuations in stable financial markets is increasingly being recognised, there is wide variation in their quality and consistency between different countries. The new agreement – which formalises the ongoing collaboration between IOSCO and IVSC – “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.”

This work promises to be an important step towards high-quality valuation information, and the consistent international standards that are a crucial piece of the puzzle.

Of course, you’d expect us to add that, for maximum consistency and comparability, valuation data should also be reported and made available to users in a structured format – i.e., XBRL. We encourage IOSCO and IVSC to embrace digital-first thinking on the path to their mutual goal of improving the financial information that regulators and market participants rely on. There is terrific collaboration going on in the Netherlands in this area, with valuers and banks working together to ensure that valuation reports are digitally structured with Inline XBRL and digitally signed, all for automatic ingestion into bank capital models.

Read more here.

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