Credit Rating Services Act, 2012 (Act No. 24 of 2012)Board NoticesCredit Rating Agency RulesPart V : Presentation of Credit Ratings10. Presentation of credit ratings |
| (1) | A credit rating agency must ensure that a credit rating states clearly and prominently the name and job title of the lead analyst in a given credit rating activity and the name and position of the person primarily responsible for approving the credit rating. |
| (2) | In its presentation of a credit rating, a credit rating agency must ensure that— |
| (a) | all substantially material sources, including the rated entity or issuer or, where appropriate, a related third party, which were used to prepare the credit rating are indicated together with an indication as to whether the credit rating has been disclosed to that rated entity or its related third party and amended following that disclosure before being issued; |
| (b) | the principal methodology or version of methodology that was used in determining the rating is clearly indicated, with a reference to its comprehensive description; |
| (c) | where the credit rating is based on more than one methodology, or where reference only to the principal methodology might cause investors to overlook other important aspects of the credit rating, including any significant adjustments and deviations, it explains this fact in the credit rating issued and indicates how the different methodologies or these other aspects are taken into account in the credit rating; |
| (d) | the meaning of each rating category, the definition of default or recovery and any appropriate risk warning, including a sensitivity analysis of the relevant key rating assumptions, such as mathematical or correlation assumptions used in its credit rating activities as well as any material changes to these, is clearly explained; |
| (e) | the date on which the credit rating was first released for distribution and when it was last updated is indicated clearly and prominently; and |
| (f) | information is given as to whether the credit rating concerns a newly issued security or financial instrument and whether it is rating the security or financial instrument for the first time. |
| (3) | A credit rating agency must clearly and prominently state any attributes and limitations of the credit rating when publishing credit ratings. |
| (4) | A credit rating agency must prominently state when disclosing any credit rating whether it considers the quality of information available on the rated entity satisfactory and to what extent it has verified information provided to it by the rated entity or its related third party. |
| (5) | If a credit rating involves a type of rated entity or security or financial instrument for which historical data is limited, the credit rating agency must make such limitations of the credit rating clear, in a prominent place. |
| (6) | In a case where the lack of reliable data or the complexity of the structure of a new type of security or financial instrument or the quality of information available is not satisfactory or raises serious questions as to whether a credit rating agency can provide a credible credit rating, the credit rating agency must refrain from issuing a credit rating or withdraw an existing credit rating. |
| (7) | When announcing a credit rating, a credit rating agency must explain in its press releases or reports and on its website the key elements underlying the credit rating. |
| (8) | A credit rating agency must indicate with each of its published ratings when the rating was last updated. |
| (9) | A credit rating agency may not use the name of any relevant authority in a manner that would indicate or suggest endorsement or approval by that authority of the credit ratings or any credit rating activities of the credit rating agency. |
| (10) | A credit rating agency must ensure that published credit ratings and reports contain details of definitions and a glossary of all terms and acronyms used in the publication. |
| (11) | Except for the requirements of sub-paragraph (10) above; where the information required to be disclosed would be disproportionate in relation to the length of the report distributed, the credit rating agency must make clear and prominent reference in the report itself to the place where such disclosures can be directly and easily accessed, including a direct web link to the disclosure on an appropriate website of the credit rating agency. |