Recently, the China Interbank Market Dealers Association (hereinafter referred to as "Dealers Association") issued "inter-bank bond market non-financial corporate debt financing instruments credit rating business conflict of interest management rules" (hereinafter referred to as "" rules ""). "Rules" clearly requires credit rating agencies should establish and improve the management of conflicts of interest related systems and mechanisms to effectively identify, prevent, eliminate and disclosure of credit rating business in an actual or potential conflict of interest relevant circumstances.
Market research firm said that this "rule" is China's regulatory authorities for the first time a clear case of conflict of interest in the credit rating business restrictions, aimed at strengthening the credit rating business self-regulation, enhance the management of conflicts of interest credit rating agencies and restraint mechanisms to protect credit the independence of ratings, objectivity and impartiality.
Over the past few years, China's credit rating industry continue to regulate the development, but the independence of the domestic rating agencies still widely criticized. In this context, to further strengthen the credit rating business self-regulation, enhance the management of conflicts of interest credit rating agencies restraint mechanism, to become parties to look forward to. This release from the "rules" Look, the new regulations on conflicts of interest management and restraint mechanisms set up in a more detailed, from isolation settings, avoiding arrangements, prohibitions, leaving the review and rotation, conflicts of interest and self-management and other aspects of management and disposition detailed provisions.
"Credit rating agencies and their personnel should abide by relevant laws and regulations and self-regulations, establish a good professional ethics, abide by the independent, objective and impartial conduct of credit rating is not affected by other external factors." The second general provisions "rules" clearly pointed out by the evaluation objects, underwriters, credit rating Principal, consumer credit ratings and other related subjects shall not affect the independence of the credit rating, objectivity and impartiality in any way .
It is worth noting that this "rule" set in isolation and avoidance arrangements, etc., to increase the number of specific and detailed requirements. In terms of setting isolation "rule" Article V requirements, credit rating agencies should establish a sound isolation mechanism, through the improvement of corporate governance, organizational structure reasonable set of measures, the scientific division of department functions, effective isolation rating personnel, prevention and management ratings business development conflicts of interest in the process. Article pointed out that credit rating agencies should maintain independence of credit rating agencies actual controller affiliates shall not affect the development and implementation of policies related to credit rating, technology and systems shall not interfere or participate in the business of credit rating agencies to carry out and rating decisions.
At the same time, this "rule" in terms of avoidance arrangements, credit rating agencies and the situation assessment by the presence of an object, such as the case of existing rating staff also made detailed provisions. For example, the case may not carry out credit rating services include: credit rating agencies and by the assessment objects for the same actual controller controlled; the same shareholders who hold credit rating agencies, shares are subject to assessment objects are up more than 5%; the actual object or subject to evaluation control who directly or indirectly hold shares of the credit rating agencies more than 5%; credit rating agencies or the actual controller directly or indirectly holds the shares subject to assessment objects more than 5%; credit rating agencies or the actual controller in carrying out the rating business held within six months before or transactions subject to assessment and objects related to securities or derivatives; other circumstances affecting the independence of the rating.
Source: China Credit
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