Securities and Exchange Commission of Pakistan proposes new regulatory regime for credit rating companies

Islamabad, November 23, 2015 (PPI-OT): The Securities and Exchange Commission of Pakistan (SECP), as part of subsidiary legislation under the Securities Act, 2015, has issued the Draft Credit Rating Companies Regulations, 2015 (Draft Regulations) for consultation purposes. The Draft Regulations are available on SECP website (www.secp.gov.pk). The Draft Regulations have been prepared keeping in view the international best practices including the guidelines issued by International Organization of Securities Commissions for credit rating companies.

The Draft Regulations introduces detailed “fit and proper criteria” for the sponsors, directors and senior management of a credit rating company. Keeping in view the significance of a rating analyst in the rating process, fit and proper criteria has also been specified for the analyst. In order to avoid potential conflict of interest, adequate provisions have been included in the Draft Regulations regarding disclosure and shareholding of the credit rating companies.

The Draft Regulations also prescribes best governance practices, obligations for credit rating companies and enhanced conduct of business requirement. Further, broad guidance has been provided with respect to contents of rating reports for standardization and quality assurance purposes. Moreover, appropriate disclosure requirements have been prescribed enabling the stake holders to make unbiased and informed decisions.

The Draft Regulations once finalized would replace Credit Rating Companies Rules, 1995 and Code of Conduct for credit rating companies. The feedback on the Draft Regulations may be forwarded to the SECP by December 07, 2015.

For more information, contact:
Shakil Ahmad Chaudhary
Head, Internal and External Communication
Securities and Exchange Commission of Pakistan (SECP)
NIC Building, 63 Jinnah Avenue, Islamabad
Tel: +92-51-9214005 or +92-51-9214009 (Ext. 378)
Fax: +92-51-9206459
Cell: +92-302-8552254
E-mail: shakil.chaudhary@secp.gov.pk
Website: www.secp.gov.pk