CIREA Reciprocity Arrangement Successfully Held The second HKIS and CIREA reciprocity arrangement was successful held in Shenzhen on 12 and 13 March 2011. The two-day training sessions and assessment would lead to CIREA and HKIS qualification. It was held in the Sunshine Hotel in which 198 candidates (99 members from each side) attended. Candidates from both Institutes enthusiastically participated in the tightly scheduled training sessions and final assessment. 99 HKIS members passed the CIREA assessment while 99 CIREA members also passed the HKIS assessment. Details of this event are reported in a separate article. The successful candidates would become the professional members of both Institutes, after completion of the membership application procedures. Meanwhile, I take this opportunity to thank the extraordinary effort made by members of CIREA Reciprocity Working Group including Messrs Edward Au, Tony Wan, Simon Poon and Ms Karen Chan and the HKIS administrative staff, in organizing this meaningful event. I would also give my sincere thanks to Dr Chai and colleagues of CIREA in co-organizing this big event. I believe we will have more co-operations in the days to come. Updates on review on Guidance Note ("GN") on rent review and Scale of Professional Charges The Draft Fee Scale After my report on this subject in the February Surveyors Times, two meetings were held with the Lands Department ("LandsD") and the Urban Renewal Authority ("URA"). In the meeting with LandsD, HKIS representatives had explained the rationale for the proposed changes to the fee scale (principally relates to the hourly rates and the revision of certain minimum fee). The LandsD would welcome further information in relation to the hourly rates as we observed in the market for other related professions - in particular for those professions which are regulated by Registration Ordinances. In the meeting with the URA, they expressed the wish to have further information on the hourly rates. For scale 2.1 on the minimum fee, they are appreciative of our rationale and are prepared to give further consideration. We will keep LandsD and URA informed on progress of the publication on fee scale so they can make the necessary adjustments to their fee scales. Meanwhile, the WG will continue collating and updating the required information for the fee scale review. We wish the new fee scale will come into effect on 1 July 2011. GN on rent review The GPD WG is currently in collaboration with RICS to revamp the GN on rent review. We have obtained inprinciple approval for funding of the project at the GPD Council level while the RICS HK is seeking funding for legal input. Members will be kept informed on progress. SFC SEHK Consultation Paper on Property Valuation A Consultation Paper on Proposed Changes to Property Valuation Requirements (the "Consultation Paper") was suggested by the Securities and Futures Commission ("SFC") and the Stock Exchange of Hong Kong ("SEHK") jointly (the "Regulators") on the property valuation requirements to be imposed by the Listing Rules on 3 December 2010. To ensure the Regulators understand our views, the HKIS GPD Council on 11 February 2011 sent our comments to the Regulators. Main points are as follows: 1. HKIS suggests to have the valuer working together with the sponsor and the applicant or issuer to determine the materiality of a property to the going concern business. 2. HKIS is happy to see the clarification of the term "Single Property Interest" and we stress the importance on the rationale and the ways to group various property interests into a "Single Property Interest". 3. HKIS does not agree to base on a property's carrying amount to determine the need to have a valuation report. 4. HKIS has reservations regarding the suggestion to remove all the leased property interests from the property valuation requirements. We opine that material property interests of the applicant or issuer must be disclosed to the public. 5. HKIS suggests property valuations under the Listing Rules must be performed by valuers who are on the List of Property Valuers for Undertaking Valuation for Incorporation or Reference in Listing Particulars and Circulars and Valuation in Connection with Takeover and Mergers published by HKIS from time to time. On 2 March 2011, the GPD representatives led by Mr Joseph Ho attended a consultation meeting with the Regulators to further elaborate our position in the draft Consultation Paper. HKIS restated our suggestion about further elaboration of property and non-property activities in order to avoid any confusion. Besides, there should be a clear justification to apply the same rules to unlisted companies such as property valuations relating to RMB bonds. Representatives from SFC clarified leased property by defining it as property under operating lease. We restated our view in preparing valuation reports for rented properties and expressed our objective to reduce unnecessary or unreasonable work to applicants or issuers. Again, we stressed on the importance of early involvement of valuers in working together with sponsors and companies to determine the materialism of rented properties. We had raised our concern on the position and the use of the HKIS Qualified Valuers list. The Regulators considered that in accordance with Para 5.08 (2)(a) of the Listing Rules that [a qualified valuer] carries on the business in Hong Kong of valuing properties and is authorized to do so by the rules of the relevant professional institution of which he is a member already referred to the application of the HKIS Qualified Valuers list. And that, it is at the discretion of HKIS to determine who is qualified to sign the reports. The Regulators asked HKIS to inform them in case HKIS finds any valuers, who are not on the HKIS Qualified Valuers list, sign the reports. They will take appropriate action subsequently. We are in agreement with the Regulators that we will perform the duty as requested by the Regulators in accordance with the Listing Rules. We will keep a close watch on the decision of the Regulators and will keep members posted on development.