Government to toughen up on Credit Rating Agencies

The MAS released a proposal to regulate the CRAs to meet international standards and practices.

According to MAS, they would require CRAs to be licensed under the Capital Markets Services (CMS) licensing regime under the Securities and Futures Act (SFA). The CRAs will be obliged to provide credit rating services and will be added into the SFA as a regulated activity. All other existing Regulations, Guidelines and Notices under the SFA that apply to all CMS licensees will still be followed accordingly.

The proposed regulatory regime will include a Code of Conduct for CRAs, based on the Code of Conduct Fundamentals for Credit Rating Agencies issued by the International Organisation of Securities Commissions. The code generally aims to promote the quality and integrity of the rating process, strengthen CRA analytical independence, strengthen investor protection and enhance protection of non-public information.