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BIZCHINA / Center
CSRC unveils credit rating management rules
By Hao Zhou (chinadaily.com.cn)
Updated: 2007-08-27 15:04
The China Securities Regulatory Commission (CSRC) yesterday promulgated
the provisional measures on managing enterprise credit ratings in the
securities market. The measures will enter into force on September 1,
2007, Xinhuanet reported.
Credit rating is a crucial step in issuing corporate bonds. The measures
will lead China further toward a stable bond market and a multi-level
capital market.
Related readings:
?CSRC to launch new rules on securities credit rating
?Credit rating system for all
?Central bank to expand use of credit database
Bonds, assets-backed securities, and other structural financing
securities with fixed return or debt approved by CSRC, as well as those
transacted in the securities market, are supposed to receive rating
classification, with the exception of?treasury bonds.
Meanwhile, bond issuers, listed firms, unlisted public companies,
securities companies, and securities investment fund management companies
are to be rated.
According to the provisional measures, if an agency plans to apply for a
securities rating license, it must first be a legal entity in China, and
either of its paid-up capital and net assets must exceed 20 million yuan
(US$2.6 million).
Those appraisers are also required to have a comprehensive business
system, such as credit levels and distinct definitions, rating standards
and procedures, rating results publishing as well as information
confidentiality systems.
Additionally, the appraisal agencies' personnel or those whose relatives
hold more than five percent shares of an enterprise, which is going to be
rated, should be dodged during the rating period.
(For more biz stories, please visit Industry Updates)
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