ISLAMABAD: 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 have been prepared keeping in view the guidelines issued by International Organization of Securities Commissions for credit rating companies, according to statement issued by SECP here on Monday.

The Draft Regulations introduces detailed “fit and proper criteria” for the sponsors, directors, senior management and analyst of a credit rating company.

In order to avoid potential conflict of interest, provisions have been included in the Draft Regulations regarding disclosure and shareholding of the credit rating companies.

Further, guidance has been provided to contents of rating reports for standardization and quality assurance purposes.

Moreover, appropriate disclosure requirements have been prescribed for the stakeholders.

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 7.

Published in Dawn, November 24th, 2015