The Capital Markets Authority (CMA) has reviewed the credit rating agencies guidelines, in a bid to enhance best practices on the conduct of sovereign or company ratings in Kenya.
Following the review, the draft Capital Markets (Credit Rating Agencies) Regulations, 2022 have been developed pursuant to Section 12(1) (h) of the Capital Markets Act, Cap 485A of the Laws of Kenya.
The draft regulations subject to stakeholder comments are set to replace current guidelines on the approval and registration of credit rating agencies issued in November 2001. The review is also aimed at complying with the requirements of the Statutory Instruments Act.
The draft regulations will detail the procedure for licensing and recognition of credit rating agencies, the rating process, and monitoring as well as disclosure of rating definitions and rationale.
“The regulations will also provide for investor protection and increased level of oversight of credit rating agencies by the Regulator,” CMA said in a public notice.
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A credit rating agency is an organization that evaluates the relative credit worthiness of issuers of securities and assigns ratings to such securities.
Currently, CMA has approved the registration and operation of five credit rating agencies including Global Credit Rating Company (GCR), Agusto & Company Limited, Metropol Corporation Limited, A.M Best Rating Services Limited and CARE Ratings.
The regulator is set to receive feedback from stakeholders on the draft regulations until September 16.
SOURCE: Capital business
