Bonhams to be Regulated by Royal Institution of Chartered Surveyors

The British art magazine Antiques Trade Gazette is reporting that international auction house Bonhams has agreed to be regulated by the Royal Institution of Chartered of Surveyors (RICS).

Bonhams chairman Robert Brooks tells the ATG We have joined RICS’s regulatory regime because we believe the time has come to establish formal regulation within the international art auction industry,” he said. “We believe RICS to be the best-placed body to become auction-industry regulator, a responsibility it has already fulfilled to wide acclaim within the real estate world.”

The ATG article continues As well as ensuring the safety of all money held on behalf of clients, regulated firms must have professional indemnity cover, set up internal and independent external client complaints procedures and show a commitment to professional and technical standards and training.

According to the article, RICS has set up an independent regulatory board that will oversee and set general guidelines for auction houses to follow. It will be interesting to see if other auction houses follow the lead set by Bonhams.

ASA is associated with RICS in the US. I wonder if ASA is looking to assist auction houses self regulate and become more transparent.

Keep in mind that this action by Bonhams is voluntary, and is not a government sponsorship or regulatory requirement. Therefore, is it just a bit of dressing over and above current auction house regulations, or is it a serious attempt to bring transparency and a bit of protection to auction house consignors and clients? Bonhams is unique in the auction industry today as they claim to keep consignor funds separate from operating accounts. With that in mind, I believe their intentions in being regulated by RICS is a true effort in third party independent auction house regulation. I would also assume it to be better than total self regulation.

If the auction house is strong and financially viable, I can see this working out and being beneficial to the public. I can also envision an auction house that may have financial trouble backing away from such programs and regulations since it is only a voluntary initiative. I guess time will be the judge.

To read the full Antiques Trade Gazette article, click HERE.