Following the issuance of Prakas 003 on 26 January 2022 on the Rules for the Management, Establishment, and Functioning of Trusts (“Prakas 003”), on 3 November 2022, the Non-Banking Financial Services Authority (“NBFSA”) issued Prakas 052 regarding the Accreditation of Valuation Companies and Valuation Specialists in the Trust Sector (“Prakas 052”) in order to ensure the accuracy of the existing registered trust in Cambodia.
Prakas 052 sets out the applicable conditions and procedures that real estate valuation companies and individual valuation specialist must satisfy in order to obtain accreditation in respect the valuation activities in the trust sector from the Trust Regulator (“TR”).
Prakas 003 requires a trustor to transfer trust funds to a licensed trustee for management, maintenance and disposal pursuant to the trust instrument (i.e. trust agreement) and related trust regulations.
Under Praka 052, the trustor (as the trust fund contributor), the trustee, and persons acting within the trust sector are obliged to select a valuation company or valuation specialist which has been (a) officially accredited; and (b) publicized as a valuation company or individual valuation specialist by the TR.
A “valuation company” refers to a legal entity that has obtained a valuation service license from the Real Estate Business and Pawnshop Regulator (“RPR”).The RPR is the official body duly designated for licensing of valuation by services by the Ministry of Economy and Finance (“MEF”). A “valuation specialist” refers to an individual professional valuation specialist who has obtained a professional certificate from RPR to provide valuation services on behalf of the valuation company.
Requirements and procedures for valuation accreditation in the trust sector: In accordance with Prakas 052, any valuation company or valuation specialist that wishes to obtain accreditation of its business activities in the trust sector must file an application to the Trust Regulator (“TR”). The details of the application requirement are determined in Prakas 052. However, before applying for accreditation, it is a precondition that the valuation company or valuation specialist obtained valuation services license or valuation professional certificate from RPR.
The TR is the competent body which has been designated by the MEF to receive, review and approve applications for valuation accreditation in the trust sector.
Validity and renewal of accreditation: Once issued by TR, the accreditation of a valuation company and / or a valuation specialist is valid for the same period as the validity of the valuation services license or valuation professional certificate issued by the RPR. The accreditation may be renewed if an application for renewal is submitted to the TR not less than 15 days before the expiration date of the relevant accreditation period.
TR has at the latest 21 days from receipt of the complete application dossier, to notify in writing to applicants whether it accepts or rejects the accreditation application or renewal application.
Rights and obligations of the accredited valuation company and valuation specialist: Once valuation accreditation is issued to a valuation company or an individual specialist then they are legally entitled to carry out the valuation service related to the trust sector and are required to fulfill the obligations as mentioned in the Prakas 052 including preparation and submission of the valuation report(s) to TR.
As part the valuation accreditation application process, the valuation company and valuation specialist must pay the government official fees (application fee and consulting fee and the annual accreditation fee) as determined under Prakas 052.
What if provisions of Prakas 052 are not complied with?
TR may apply administrative sanctions to a valuation company or a valuation specialist in cases of non-compliance with the terms and conditions of accreditation.
Those administrative sanctions include:
(b) a rectification instruction;
(c) a restriction on accreditation;
(e) revocation of accreditation; and
(f) monetary fines.
The conditions applicable to suspension or revocation of accreditation for valuation company and valuation specialist are mentioned in Prakas 052 fall outside the scope of this legal update.
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