The conditions specified in the regulation 10 (restrictions on credit rating companies) of the Credit Rating Companies Regulation, 2016 would not be applicable in case a credit rating assignment is obtained through open bidding under the Public Procurement Rules, 2004 or any other applicable law relating to procurement of services.
Under duties and obligations of the credit rating companies, the SECP has directed these agencies to ensure that a periodic or annual review of risk management systems and controls of the credit rating company is carried out- (i) by the internal audit department, which reports directly to the board of directors or its audit committee; or through outsourced firm of chartered accountants, which has been assigned a satisfactory Quality Control Review rating by the Institute of Chartered Accountants of Pakistan.
The credit rating company shall designate an officer as a compliance officer; or appoint a firm of chartered accountants, which has been assigned a satisfactory Quality Control Review rating by the Institute of Chartered Accountants of Pakistan, for monitoring compliance of the credit rating company with the applicable regulatory regime and a credit rating company may outsource both its compliance and internal audit functions to a single firm of Chartered Accountants.
The compliance officer or a firm of chartered accountants, as the case may be, shall prepare compliance reports, on semi-annual basis, which shall be submitted to the board of directors of the credit rating company. In case of dual private rating, authorizing the existing credit rating company to make public the private rating assigned by it, in case its client approaches another credit rating company, during the life of the contract with the existing credit rating company, to make public the private rating assigned by such other credit rating company.
Whenever a private rating has been assigned by a credit rating company, and its client approaches, during the life of the contract with the existing credit rating company, to another credit rating company to make public the private rating assigned by such other rating company the existing credit rating company shall also make public the private rating assigned by it, SECP said.
A credit rating company shall review all the outstanding ratings on semi-annual basis or upon occurrence of such an event which requires to do so: Provided that public dissemination of semi-annual review will be required only in case of any change in the underlying rating. Under the schedule of fee to be paid by the credit rating companies, the SECP has issued a revised the said schedule. The fee to be paid at the time of obtaining permission to form a credit rating company (Rs 100,000) and fee to be paid at the time of applying for renewal of license (Rs 500,000) have been omitted under the revised regulations. The new regulations have specified on that fee to be paid at the time of applying for license as a credit rating company is Rs 1,000,000.