Credit Rating Services Act, 2012 (Act No. 24 of 2012)Chapter 1 : Definitions, Objects and Application1. Definitions and interpretation |
(1) In this Act, unless tile context indicates otherwise—
in relation to—
| (a) | a juristic person— |
| (i) | which is a company, means its subsidiary and its holding company and any other subsidiary or holding company thereof as defined in section 1 of the Companies Act; |
| (ii) | which is a close corporation registered under the Close Corporations Act, 1984 (Act No. 69 of 1984), means any member thereof as defined in section 1 of that Act; |
| (iii) | which is not a company or close corporation, means another juristic person which would have been its subsidiary or holding company— |
| (aa) | had it been a company; or |
| (bb) | in the case where that other juristic person is not a company either, had both it and that other juristic person been a company; |
| (iv) | means any person in accordance with whose directions or instructions its board of directors or, in the case where such juristic person is not a company, the governing body of such juristic person, acts; or |
| (b) | any person— |
| (i) | means any juristic person whose board of directors or, in the case where such juristic person is not a company, the governing body of such juristic person, acts in accordance with its directions or instructions; or |
(ii) means a trust controlled or administered by the juristic person;
means the Financial Sector Conduct Authority established by section 56 of the Financial Sector Regulation Act;
[Definition inserted by section 290, item 1(a) in Schedule 4, of Act No. 9 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018]
means the Companies Act, 2008 (Act No. 71 of 2008);
has the same meaning ascribed to it in terms of section 1(1) of the Financial Sector Regulation Act;
[Definition inserted by section 290, item 1(b) in Schedule 4, of Act No. 9 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018]
means an opinion regarding the credit worthiness of—
| (a) | an entity; |
| (b) | a security or a financial instrument; or |
| (c) | an issuer of a security or a financial instrument, |
using an established and defined ranking system of rating categories, excluding any recommendation to purchase, sell or hold any security or financial instrument;
"credit rating agency"
means a person who provides credit rating services;
"credit rating services"
means data and information analysis, evaluation, approval, issuing or review, for the purposes of credit ratings;
"deputy registrar"
[Definition deleted by section 290, item 1(c) in Schedule 4, of Act No. 9 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018]
"external credit rating"
means a credit rating issued by an external credit rating agency;
means a person who provides credit rating services and who is authorised or registered by a regulatory authority to perform credit rating services similar to those regulated under this Act and who is subject to the laws of a country other than the Republic, which laws—
| (a) | establish a regulatory framework which is approved by the registrar as being equivalent to that established by this Act; and |
| (b) | are supervised and monitored by a regulatory authority; |
means the Financial Sector Regulation Act, 2017;
[Definition inserted by section 290, item 1(d) in Schedule 4, of Act No. 9 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018)]
[Definition deleted by section 290, item 1(e) in Schedule 4, of Act No. 9 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018]
"FSB official website"
[Definition deleted by section 290, item 1(e) in Schedule 4, of Act No. 9 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018]
"group"
means a group consisting of two or more juristic persons, irrespective of whether any of those persons is domiciled in the same country as any of the others, and one or more of which is a credit rating agency, where—
| (a) | each of the juristic persons is an associate of any one of the others; or |
| (b) | the juristic persons are so interconnected that should one of them experience financial difficulties, another one or all of them would likely be adversely affected; |
means the Minister of Finance;
means the contracting out of a function to an external provider in a manner that may materially impair the quality of the internal control of the registered credit rating agency and the ability of the registrar to supervise the compliance of the registered credit rating agency with its obligations under this Act;
"person"
means any natural person, partnership or trust, and includes—
| (a) | an organ of state as defined in section 239 of the Constitution of the Republic of South Africa, 1996; |
| (b) | any company incorporated or registered as such under any law; or |
| (c) | any body of persons, corporate or unincorporate; |
"prescribe"
[Definition deleted by section 290, item 1(e) in Schedule 4, of Act No. 9 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018]
"Promotion of Administrative Justice Act"
means the Promotion of Administrative Justice Act, 2000 (Act No. 3 of 2000);
"publish"
means any direct or indirect communication transmitted by any medium, or any representation or reference written, inscribed, recorded, encoded upon or embedded within any medium, by means of which a person seeks to bring any information to the attention of a person, or all or part of the public, and "published", "publishes" or "made public" has a corresponding meaning;
means any legislation, including subordinate legislation, or any registration, licence, directive or similar authorisation issued by a regulatory authority or pursuant to any statutory authority;
means a rating symbol, such as a letter symbol or a numerical symbol which might be accompanied by appending identifying characters, used in a credit rating to provide a relative measure of risk to distinguish the different risk characteristics of the type of rated entity, issuer or financial instrument or other asset;
means the Financial Sector Information Register referred to in section 256 of the Financial Sector Regulation Act.
[Definition inserted by section 290, item 1(f) in Schedule 4, of Act No. 9 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018)]
"registrar"
[Definition deleted by section 290, item 1(g) in Schedule 4, of Act No. 9 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018]
"registered credit rating agency"
means a credit rating agency or an external credit rating agency registered in terms of section 5;
"regulated person"
means a person that has been granted authority to conduct business or activities by a regulatory authority;
"regulatory authority"
means an organ of state as defined in section 239 of the Constitution of the Republic of South Africa, 1996, responsible for the supervision or enforcement of legislation dealing with the regulation of institutions and the provision of financial services, or a similar body designated in the laws of a country other than the Republic to supervise and enforce legislation of that country;
"regulatory purposes"
means the use of credit ratings for the specific purpose of complying with national legislation or the listings requirements made by an exchange under section 11 of the Financial Markets Act, 2012 (Act No. 19 of 2012);
[Definition amended by section 261 of Act No. 45 of 2013]
"rule"
means a rule made in terms of section 24;
"structured finance instrument"
means a financial instrument or other asset resulting from a securitisation transaction or other structured financial transaction or scheme;
"this Act"
includes the regulations, rules and any notices or directives issued, exemption granted, determinations made, requirements determined or conditions imposed by the registrar, that have general application; and
means the Financial Sector Tribunal established in terms of section 219 of the Financial Sector Regulation Act.
[Definition inserted by section 290, item 1(h) in Schedule 4, of Act No. 9 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018)]
has the meaning set out in section 1 of the Electronic Communications and Transactions Act, 2002 (Act No. 25 of 2002).
| (2) | For purposes of this Act, any reference to "company", "holding company" or "subsidiary" means a reference to a company, holding company or subsidiary, as the case may be, as defined in the Companies Act, or a similar entity incorporated under the laws of a country other than the Republic. |
| (3) | Any decision or other action of an administrative nature taken by the registrar that affects the rights of another person, including a regulated person, must comply with the Promotion of Administrative Justice Act or this Act. |
| (4) | Nothing in this Act deprives any person of any right that such person holds under the Promotion of Access to Information Act, 2000 (Act No. 2 of 2000). |
(5)
| (a) | A registered credit rating agency that publishes any information or any credit rating in the performance of credit rating services or is required to publish, disclose, produce or provide a policy, code, document or information under this Act, must publish, disclose, produce or provide that credit rating, information, policy, code or document |
(i) in a prescribed form; or
(ii) in plain language, if no form has been prescribed.
| (b) | For the purposes of this Act, a credit rating , policy, code, document or information is in plain language if it is reason able to conclude that a person of the class of persons for whom the credit rating, policy, code, document or information is intended, with average literacy skills and experience in dealing with credit ratings, credit rating services and credit rating agencies, could be expected to understand the content, significance and import of the credit rating, information, policy, code, document or information without difficulty, having regard to— |
| (i) | the context, comprehensiveness and consistency of the credit rating, information, policy, code, document or information; |
| (ii) | the organisation, form and style of the credit rating , policy, code, document or information; |
| (iii) | the vocabulary, usage and sentence structure of the credit rating, policy, code, document or information; and |
| (iv) | the use of any illustrations, examples, headings or other aids to reading and understanding the credit rating , policy, code, document or information. |
| (6) | If, in terms of this Act, a credit rating, policy, code, document, information, record or statement is required to be— |
| (a) | retained, it is sufficient if an electronic original or reproduction of that credit rating, policy, code, document, information, record or statement is retained as provided for in sections 15 and 16 of the Electronic Communications and Transactions Act, 2002 (Act. No. 25 of 2002); or |
| (b) | published , disclosed, produced or provided, it is sufficient if— |
| (i) | an electronic original or reproduction of that credit rating, policy, code, document, information, record or statement is published, disclosed, produced or provided by electronic communication in such a manner and form that the credit rating, policy, code, document, information, record or statement can conveniently be printed by the recipient within a reasonable time and at a reasonable cost; or |
| (ii) | a notice of the availability of that credit rating , policy, code, document, information, record or statement, summarising its content and satisfying any prescribed requirements, is delivered to each intended recipient of the policy, code, document, information, record or statement, together with instructions for receiving the complete policy, code, document, information, record or statement. |
| (7) | Unless the context otherwise indicates, words and expressions not defined in subsection (1) have the same meaning ascribed to them in terms of the Financial Sector Regulation Act. |
[Section 1(7) inserted by section 290, item 1(i) in Schedule 4, of Act No. 9 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018)]