06 July 2015
The EBA published today its final draft Regulatory Technical Standards (RTS) setting out the general criteria against which valuers should be assessed to determine whether they comply with the legal requirement of independence for the purposes of performing valuation tasks under the Bank Recovery and Resolution Directive (BRRD). These RTS are part of the EBA's work to ensure the effectiveness of the resolution regime established by EU legislation.
The BRRD specifies, among other things, that independent valuers shall be appointed to determine whether the conditions for resolution are met as well as the scope of resolution measures to be taken. In this respect, these final draft RTS aim to ensure that eligibility to be an independent valuer is assessed in a consistent manner across the Union, thereby increasing legal certainty, enhancing confidence in the valuation process and ensuring a level playing field. In particular, the draft RTS set out general criteria under which a person can be deemed independent from both the resolution authority and the institution or entity subject to the valuation.
Besides possessing the qualifications, experience, ability, knowledge and resources required to carry out the valuation effectively, the valuer must be legally separated from the relevant public authorities and the entity subject to the valuation and have no actual or potential material interests in common or in conflict with any relevant authority or the entity concered which could influence the valuer's judgement in carrying out the valuation.
Only two specific situations are identified by the final draft RTS as situations which preclude per se a person from being the independent valuer: where the person is not separate from the any relevant public authority or the entity subject to valuation and where the person, in the year preceding the date on which that person's eligibility to act as independent valuer is assessed, has completed a statutory audit of the entity concerned.
Further to consultation feedback, the draft RTS have been refined to ensure an appropriate balance between the need for harmonisation of the process for assessing independence whilst at the same time ensuring that all matters relevant to the appointment of an independent valuer in a particular case (e.g. in terms of the expertise and experience needed) can be taken into account.
Legal basis and next steps
These standards have been developed according to Article 36(14) of the BRRD, which mandates the EBA to draft RTS concerning the circumstances in which a person is to be considered independent from any public authority, including the resolution authority, and the relevant entity, and can therefore act as an independent valuer.
The draft RTS have been submitted to the European Commission for endorsement, following which they will be subject to scrutiny by the European Parliament and the Council before being published in the Official Journal of the European Union.