To implement and enforce the “Asset Valuation Law,” strengthen supervision and management of the asset valuation industry, and promote the healthy development of the asset valuation sector, the Ministry of Finance has revised the “Measures for the Approval and Supervision and Management of Asset Valuation Agencies.” ( Ministry of Finance Order No. 64 Number, hereinafter referred to as 64 Order ) Revisions have been made, and the “Administrative Measures for the Supervision and Management of the Asset Valuation Industry” have been drafted. ( Draft for Solicitation of Comments on Revision ) 》 ( Hereinafter referred to as the “Draft for Comments” ) and publicly solicit comments from the society. The “Asset Valuation Law” is set to be enacted this year. 12 Moon 1 Against the backdrop of the day's implementation, the “Draft for Soliciting Opinions” addresses... 64 What revisions were made to the order? ? What are the characteristics and direction of the entire revision? ? What practical considerations underlie these revisions? ? How do industry insiders evaluate this revision effort, and what constructive comments and suggestions do they have for the “Draft for Soliciting Opinions”? ? On this issue, a reporter from Caihui Xinbao interviewed industry insiders.

　　 The regulatory scope of the asset valuation industry is expanding.

　　According to Article 39 of the “Asset Valuation Law,” “the administrative departments for valuation under the State Council shall organize the formulation of basic valuation standards and regulations for the supervision and management of the valuation industry.” In light of this, the Ministry of Finance has issued a “Draft for Comments.” Compared with the previous version, the “Draft for Comments”... 64 Order , Significant revisions have been made.

　　The draft for soliciting comments released this time has been comprehensively revised in accordance with the requirements of the “Asset Valuation Law.” The document consists of... 6 Chapter 63 The provisions include general principles, subjects of supervision and administration, filing management, supervision and inspection as well as investigation and handling, legal responsibilities, and supplementary provisions. Previously... 64 The regulations primarily govern matters such as the establishment, modification, termination, and day-to-day management of asset valuation agencies. The regulatory focus is on formalities and ex ante approvals. The draft for comments essentially abolishes ex ante approvals and endorsements, placing greater emphasis on ongoing and post-event supervision of asset valuation-related activities. It also introduces social oversight and publicly discloses penalty cases, thereby highlighting the transparency of regulatory oversight in the asset valuation industry.

　　The “Draft for Soliciting Comments” in the original 64 Building on the original guidelines, the “Asset Valuation Law” has undergone major revisions to its relevant provisions, reducing the number of pre-approval procedures, clarifying subsequent regulatory requirements, and expanding the scope of supervision and management over the asset valuation industry by the Ministry of Finance. The promulgation of the “Asset Valuation Law” clearly distinguishes between statutory and non-statutory business activities. The Ministry of Finance believes that the scope of regulatory oversight should not be limited solely to institutions engaged in statutory business, but should instead extend to all relevant practitioners and self-regulatory organizations, enabling the Ministry to more effectively perform its regulatory functions in the asset valuation industry.

　　Previous 64 The regulations primarily govern the supervision and management of asset valuation agencies. The “Asset Valuation Law” defines the five major market entities involved in the valuation industry, including asset valuation agencies, valuation professionals, asset valuation associations, clients, and administrative regulatory authorities. In response to the government’s efforts to streamline administration and delegate power, the reforms of asset valuation associations, and the development needs of the asset valuation industry, the draft for public comments now released brings all entities related to the asset valuation industry—namely, asset valuation agencies, valuation professionals, and asset valuation associations—under the scope of supervision and management. At the same time, it also takes into account the responsibilities of clients involved in statutorily mandated valuation services.

　　The appraisal industry encompasses not only asset valuation but also real estate appraisal, land appraisal, mining rights appraisal, and more. The “Draft for Comments” focuses on the overall development of the appraisal industry and includes provisions covering communication and information sharing with peer appraisal industry associations. Meanwhile, to promote the development of the asset appraisal industry, the “Draft for Comments” also standardizes the handling of cases transferred from other departments.

　　 Chapter Four and the Supplementary Provisions have undergone significant changes.

　　Chapter 4, “Supervision, Inspection, and Investigation & Handling,” of the “Draft for Soliciting Opinions” has undergone significant changes. With the exception of Articles 41 and 42, which remain unchanged from the original version. 64 The provisions retained in the order are all newly added, covering key supervision and inspection items as well as specific supervision and inspection procedures. In this regard, Walkson... ( Beijing ) Wang Junhui, Director of R&D at International Asset Valuation Co., Ltd., told a reporter from Caihui Xinbao that strengthening supervision during and after the event is an important principle underlying this revision of the document. This principle aligns with the current needs of the asset valuation industry’s development and can greatly promote the industry’s efforts to improve and strengthen itself—for example, by clearly defining what constitutes false or materially omitted valuation reports.

　　The term “false or materially misleading appraisal reports” originates from Article 173 of the Securities Law and primarily refers to reports illegally issued by asset appraisal institutions in China’s securities market. Articles 45, 47, and 48 of the Asset Appraisal Law specify the penalties for appraisal institutions and appraisal professionals who issue false or materially misleading appraisal reports. The “Draft for Comments” standardizes the entire process—ranging from complaints and whistleblowing, through inspections and investigations, to penalties and public announcements—thus endowing the Asset Appraisal Law with greater enforceability. Such measures will further promote the enhancement of professional competence among asset appraisal institutions and appraisal professionals, thereby helping to establish a positive industry image for the asset appraisal sector.

　　Chapter IV of the “Draft for Soliciting Opinions” stipulates that the client or relevant parties involved in asset valuation, as well as the asset valuation agency or professional asset valuers, may mutually supervise and file complaints against each other. Article 47 of the “Draft for Soliciting Opinions” provides: “The client or relevant parties involved in asset valuation may file a complaint with the competent financial authorities regarding the following actions by the asset valuation agency or professional asset valuer; citizens, legal entities, or other organizations may also report such actions to the competent financial authorities.” ( One ) Engaging in statutory asset valuation services illegally ;( Two ) Violating the asset valuation procedures ;( Three ) Asset valuation professionals engaging in improper practice. ;( Four ) “Those who issue false asset valuation reports or asset valuation reports containing significant omissions.” Article 48 stipulates: “In statutory asset valuations, the relevant parties involved in the asset valuation may file complaints or reports with the competent financial authorities regarding the following actions by the client or the entity being valued:” ( One ) Failure to legally commission a qualified asset appraisal agency to conduct the statutory asset appraisal when required. ;( Two ) Colluding with or instigating asset appraisal agencies or asset appraisers to issue false appraisal reports. ;( Three ) Failure to provide the asset appraisal agency with true and accurate ownership certificates, financial accounting information, and other relevant materials.” The standardized content for complaints and reports stems from the requirement in Article 31 of the “Asset Appraisal Law”: “If the client believes that the appraisal agency or the appraisal professional has engaged in illegal business activities, the client may file a complaint or report to the relevant administrative department for appraisal or the industry association. The relevant administrative department for appraisal or industry association shall promptly investigate and handle the complaint or report and provide a response to the client.” In this regard, Wang Junhui stated that this measure helps safeguard the rights of asset appraisal agencies, appraisal professionals, and clients in asset appraisal engagements; it helps clarify and standardize the responsibilities of both parties in economic activities related to asset appraisal; and it promotes the healthy development of the asset appraisal industry.

　　In addition, the “Supplementary Provisions” section has also undergone significant changes. It no longer includes special provisions for economically underdeveloped regions and specialized asset valuation agencies, instead shifting its focus to the issue of foreign investors investing in asset valuation agencies. In this regard, Wang Junhui stated that, with the removal of restrictions on the establishment conditions for asset valuation agencies and their branches, the special provisions previously applicable to economically underdeveloped regions and specialized valuation agencies no longer carry much significance. ; With the rapid development of China’s economy and the increasingly important role of asset valuation services in the current economic transformation, China’s economic development is becoming ever more internationalized. There are growing numbers of cases in which foreign institutions invest in domestic enterprises, and domestic enterprises “go global” to invest in overseas entities. Consequently, there is a rising demand for asset valuation agencies from foreign-invested enterprises. Based on this... 2016 Year 7 Moon 2 At the press conference held by the Standing Committee of the National People's Congress, a response was given regarding foreign nationals practicing in China. The draft for soliciting comments specifically clarifies the relevant provisions concerning foreign investors’ investment in asset valuation agencies and the conduct of statutory asset valuation services by asset valuation agencies with foreign investment. This aligns with the needs of national economic development and will also help further promote the development of the asset valuation industry.

　　 Experts recommend that certain provisions need further clarification.

　　Regarding the “Draft for Comments,” Shao Weishi, Deputy General Manager of Beijing Luhao Asset Appraisal Co., Ltd., told a reporter from Caihui Xinbao that this revision is primarily aimed at aligning with the promulgation of the “Asset Appraisal Law” and adjusting those parts of the original document that are no longer consistent with the law. Moreover, given China’s rising international status and the development of the socialist market economy in recent years, it has become necessary to strengthen this aspect of the regulations as well. Wang Junhui stated that the “Draft for Comments” meets the current needs of China’s economic development, embodies the legislative spirit of the “Asset Appraisal Law,” and will greatly facilitate the market-oriented transformation of the asset appraisal industry. From the perspective of regulatory content, the “Draft for Comments” does not impose specific restrictions on the establishment conditions for appraisal institutions or the threshold requirements for setting up branch offices. This significantly lowers the barriers to entry for establishing appraisal institutions, emphasizing survival of the fittest rather than nanny-style development under government regulation, which will further promote the growth of the appraisal industry and encourage appraisal institutions to enhance their professional competence and deliver higher-quality services.

　　Article 48 of the “Draft for Soliciting Opinions” stipulates that complaints and reports can be filed against relevant actions taken by the entrusting party and the assessed entity. Article 50 further specifies that if a complaint or report falls within the purview of the financial authorities, the financial authorities shall accept and handle it. Shao Weishi stated that it is necessary to clearly define which types of entrusting parties and assessed entities—and their related actions—are within the scope of the financial authorities’ regulatory responsibilities. Regarding the regulation of asset valuation professionals and asset valuation associations, Shao Weishi suggested clearly defining the specific aspects of oversight applicable to asset valuation professionals. ; The regulation of the Asset Appraisal Association should take into account how the broader national environment over the next two years shapes the recognition of industry associations’ status.

　　The "Draft for Soliciting Comments" contains a total of [number] provisions concerning the regulation of asset valuation professionals. 6 The provisions include requirements such as practicing exclusively at one asset valuation agency, not signing statutory valuation reports without obtaining the qualification of an asset appraiser, and refraining from engaging in activities that harm the legitimate interests of the asset valuation agency. In response, Wang Junhui pointed out that the above-mentioned provisions tend to focus more on regulatory restrictions; in fact, it would be appropriate to also consider, from a facilitating perspective, guiding asset valuation professionals toward enhancing their professional capabilities.

　　Wang Junhui also offered the following opinions and suggestions: (1) Article 7 in the General Provisions would be more appropriately placed in Chapter Two. ;(2) Article 9: The number limit for the establishment of asset valuation agencies has not been explicitly specified. It remains unclear whether the calculation of the number of appraisers must include only certified asset appraisers or whether other requirements apply. Such ambiguities should be clarified in accordance with the provisions of Article 15 of the “Asset Valuation Law.” ;(3) Article 14: It should be clarified whether the definitions of duties applicable to the legal representative and the partner responsible for executing partnership affairs also apply to appraisal professionals. ;(4) Article 15: The necessity of imposing limits on the number of asset appraisers within appraisal institutions when conducting statutorily mandated appraisal services is questionable. Moreover, the signing of statutory appraisal reports may overlap with the requirements set forth in Article 14. ;(5) Article 60: It should be clarified whether the public disclosure of penalties for violations of the “Asset Valuation Law” applies to penalties imposed in industry supervision and inspection, complaint and report cases, and cases referred from other departments.