Regulatory Alerts2016-08-05
Added · Updated
Credit Rating Companies Regulation, 2016
The Securities and Exchange Commission of Pakistan establishes licensing, operational, and governance requirements for credit rating companies under the Securities Act, 2015. The regulations mandate that entities obtain a license, maintain a minimum 20% sponsor representation on the board, and adhere to strict shareholding limits, including a 20% cap for single shareholders and a 25% cap for individuals. It prohibits credit rating companies from engaging in conflicts of interest, such as rating associated companies or accepting assignments where significant shareholders overlap with the rated entity. Existing companies registered under the 1995 Rules are required to comply with these new provisions within one year of the regulation's immediate effective date.