Credit Rating Services Act, 2012 (Act No. 24 of 2012)Chapter 4 : Endorsement of External Credit Ratings18. Requirements for endorsement of external credit ratings |
| (1) | A registered credit rating agency may, subject to the approval of the registrar, endorse external credit ratings, if— |
| (a) | the credit rating services resulting in the issuing of the credit rating to be endorsed are undertaken partly or entirely— |
| (i) | by the registered credit rating agency; or |
| (ii) | by an external credit rating agency belonging to the same group as that registered credit rating agency; |
| (b) | the registered credit rating agency has verified and is able to demonstrate on an ongoing basis to the registrar that the external credit rating agency is authorised or registered by a regulatory authority to perform credit rating services similar to those regulated under this Act and is subject to the laws of a country other than the Republic, which laws— |
| (i) | establish a regulatory framework equivalent to that established by this Act; and |
| (ii) | are supervised by a regulatory authority; |
| (c) | the ability of the registrar to assess and monitor the compliance of the external credit rating agency with the regulatory framework referred to in paragraph (b) is not limited; |
| (d) | the registered credit rating agency provides the registrar, on the registrar's request, with all information necessary to enable the registrar to monitor, on an ongoing basis, compliance with this Act; |
| (e) | there is an objective reason for the credit ratings to be issued in a country other than the Republic, or by an external credit rating agency; and |
| (f) | an agreement contemplated in section 29 has been entered into between the registrar and the relevant regulatory authority of the external credit rating agency, which agreement, at least, provides for— |
| (i) | mechanisms for the exchange of information; and |
| (ii) | procedures for the coordination of regulatory activities to facilitate the monitoring of credit rating activities resulting in the issuing of the endorsed credit rating on an ongoing basis. |
| (2) | A credit rating endorsed under this section is deemed— |
| (a) | to be a credit rating issued by a credit rating agency registered under this Act; and |
| (b) | to have been issued when the credit rating is published on the website of the registered credit rating agency or by other means, or is distributed by subscription and presented and disclosed in accordance with the requirements of this Act. |
| (3) | A registered credit rating agency that endorsed a credit rating under this section remains fully responsible for that credit rating and for compliance with this Act. |
(4)
| (a) | A registered credit rating agency must apply to the registrar in the manner prescribed, for the approval of the external credit rating agencies whose credit ratings it intends to endorse under this section. |
| (b) | If the registrar is of the opinion that a credit rating cannot be endorsed in accordance with this section or the requirements of this Act, the registrar may instruct the registered credit rating agency not to endorse the credit rating. |
| (5) | A registered credit rating agency may not use endorsement with the intention of avoiding the requirements of this Act. |
| (6) | The registrar must maintain a list on the FSB official website of external credit rating agencies whose ratings may be endorsed in terms of this section. |