Hong Kong Proposes New Credit Rating Agency Regulation

April 27, 2011 by · Leave a Comment
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Hong Kong’s Securities and Futures Commission (SFC) has proposed new licensing and supervision of credit rating agencies. The stated goals, as quoted by Maureen Whalen when writing for Lexology, are to “mandate minimum conduct standards for CRAs, including requirements that credit rating activities be conducted in accordance with principals [sic] of integrity, transparency, responsibility and good governance” and “ensure that ratings prepared in Hong Kong continue to be serviceable in other jurisdictions, including for regulatory purposes.”
The proposed legislation would necessitate minimum capital requirements for all credit rating services activity, and credit rating agencies would be required to separate their credit rating business from other types of business.
The new rules are planned to be implemented by the end of January 2011. Comments on the proposal are due by August 20, 2010.

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