Credit Rating Services Act, 2012 (Act No. 24 of 2012)Chapter 3 : Duties of Registered Credit Rating Agency16. Independent compliance unit |
| (1) | A registered credit rating agency or the group to which the registered credit rating agency belongs, must establish and maintain a permanent, independent and effective compliance unit approved by the registrar in accordance with the criteria and guidelines prescribed by the registrar. |
| (2) | A registered credit rating agency must— |
| (a) | ensure that the compliance unit has the necessary authority, resources, expertise and access to all relevant information; and |
| (b) | appoint a compliance officer who is responsible for the compliance unit and for any compliance reporting, and inform the registrar of such appointment and the details of that person. |
| (3) | A compliance officer must— |
| (a) | monitor and report to the registrar on the compliance of the registered credit rating agency and its employees in respect of the obligations of the registered credit rating agency under this Act and any codes, policies, procedures or systems required to be established under this Act; |
| (b) | advise and assist the registered credit rating agency in complying with its obligations under this Act; |
| (c) | report directly to the board of the registered credit rating agency; |
| (d) | review compliance with policies and procedures to manage conflicts of interest and assess the risk of non-compliance for the integrity of the credit rating process; |
| (e) | review compliance with internal controls with regard to the procedures and methodologies for determining credit ratings, including quantitative and qualitative models used in the rating process; and |
| (f ) | in consultation with the board of the registered credit rating agency, resolve, avoid or mitigate any conflicts of interest that may arise. |
| (4) | A compliance officer may not— |
| (a) | perform credit ratings; |
| (b) | participate in the development of rating methodologies or models; |
| (c) | perform marketing or sales functions; or |
| (d) | participate in establishing compensation levels, other than for employees working for the compliance officer. |
| (5) | The compensation of a compliance officer by the registered credit rating agency may not be linked to the business performance of the registered credit rating agency, and shall be structured in a manner that ensures independence of judgment. |
(6)
| (a) | A compliance officer must annually prepare a compliance report on the compliance of the registered credit rating agency with this Act and any codes, policies, procedures or systems required to be established under this Act. |
| (b) | The compliance officer must submit the compliance report to the registrar, together with the audited financial statements of the registered credit rating agency. |
| (7) | The compliance officer must submit any other reports to the registrar in the prescribed manner. |
| (8) | Despite anything to the contrary contained in any law, a compliance officer must report to and inform the registrar in writing of any irregularity or suspected irregularity in the conduct or the affairs of the registered credit rating agency or any breach of this Act. |
| (9) | If the appointment of a compliance officer is terminated, the compliance officer must— |
| (a) | submit to the registrar a statement of what the compliance officer believes to be the reasons for that termination; and |
| (b) | if the compliance officer would, but for that termination, have had reason to submit to the registrar a report contemplated in subsection (8), submit such a report to the registrar. |
| (10) | The registrar may direct a registered credit rating agency to terminate the appointment of a compliance officer, if the compliance officer fails to comply with any provision of this section in a material manner. |