CREDIT RATING COMPANIES RULES, 1995
(S.R.O. NO. 759(I)/1995, dated 26-7-95)
S.R.O. 759 (I)/95.-
In exercise of powers conferred by section 33 of the Securities and
Exchange Ordinance, 1969 (XVII of 1969), the Federal Government is pleased to
make the following rules to regulate the business of credit rating companies,
namely:-
1.
Short title and commencement.- (1) These rules may be called the Credit
Rating Companies Rules, 1995.
(2) They shall come into force at once.
2. Definitions.- In these rules, unless
there is anything repugnant in the subject or context,-
(a)
[1][“Commission”
means the Securities and Exchange Commission of Pakistan;]
(b)
“company” means a
company incorporated under the Companies Ordinance, 1984 (XLVII of 1984);
(c)
“credit rating
company” means a company which intends to engage in or is so engaged primarily
in the business of evaluation of credit risk through a recognised and formal
process of assigning rating to present or proposed loan obligations of any
business enterprise;
(d)
“form” means a
form set out in the Schedule to these rules; and
(e)
“Ordinance” means
the Securities and Exchange Ordinance, 1969 (XVII of 1969).
[1] Substituted
vide S.R.O. No.319(I)/2002 dated June 12, 2002
3. Eligibility for registration.- A
company proposing to commence business as a credit rating company shall be
eligible for registration under these rules if it fulfils or complies with the
following conditions or requirements, namely:-
(a)
That such
company is incorporated as a limited company under the Companies Ordinance,
1984 (XLVII of 1984);
(b)
that such
company has entered into a joint venture or technical collaboration arrangement
with an internationally recognised credit rating institution [1][for a period of not less than five years];
(c)
that no
director, officer or employee of such company has been convicted of fraud or
breach of trust or has been adjudicated as insolvent;
(d)
that the
promoters of such company are, in the opinion of the Authority, persons of
means and integrity and have special knowledge of matters which the company may
have to deal with as a credit rating company; [2][and
(e)
that the
chief executive of the company is not chief executive of any other company or
holding similar position in any other company.]
4. Registration.- (1) Any company which
is eligible for registration under rule 3 as a credit rating company may make
an application in Form I to the [3][Commission]
for registration.
(2)
An application under sub-rule (1) shall, besides the other documents
referred to in Form-I, be accompanied by a fee of one hundred thousand rupees
as registration fee.
[1]
Inserted vide S.R.O. No.319(I)/2002 dated June 12,
2002
[2]
Inserted vide S.R.O. No.319(I)/2002 dated June 12,
2002
[3]
Substituted vide S.R.O. No.319(I)/2002 dated
June 12, 2002
(3) The [1][Commission] may, if it is satisfied after
such enquiry and after obtaining such further information as it may consider
necessary,-
(i)
that the
applicant is eligible for registration; and
(ii)
that it would
be in the interest of the capital market so to do;
May grant a certificate of registration to such company in
Form II.
5. Renewal of registration.- (1) The
certificate of registration of a company shall be valid for one year and shall
be renewable on payment of a fee of ten thousand rupees through an application
made on Form III.
(2) The [2][Commission]
shall, after making such enquiry and after obtaining such further information
as it may consider necessary, renew the
registration of such company for one year in Form IV within thirty days of the
receipt of the application or further information, as the case may be.
6. Cancellation of registration.- Where the [3][Commission] is of the opinion that a credit
rating company has contravened any provision, or has otherwise failed to comply
with any requirement of the Ordinance or
of any rule or direction made or given thereunder, the [4][Commission] may, if it considers
necessary in the public interest so to do, by order in writing, cancel the
registration of the credit rating company:
Provided that no such order shall be made except after
giving the credit rating company an opportunity of being heard.
[1]
Substituted vide S.R.O. No.319(I)/2002 dated
June 12, 2002
[2]
Substituted vide S.R.O. No.319(I)/2002 dated
June 12, 2002
[3]
Substituted vide S.R.O. No.319(I)/2002 dated
June 12, 2002
[4]
Substituted vide S.R.O. No.319(I)/2002 dated
June 12, 2002
7.
Power of the
Authority to give directions.- The Commission may, if it is satisfied that
it is necessary or expedient so to do in the public interest or in the interest
of capital market, by order in writing, give direction to a credit rating company.
8.
Submission
of ratings report to the [1][Commission.-
(1) Every credit rating company shall submit to the Commission a report giving
sector-wise details of credit rating notified during the year, fee structure
and any other information, as may be
specified by the Commission in writing from time to time, within four months of the close of its
accounting year.]
Explanation.- For the purpose of this sub-rule the expression
“credit rating” means formal evaluation of credit history of the company and
capability of repaying its obligations.
(2) Without prejudice to the provisions of
sub-rule (1), a credit rating company shall furnish to the Authority such other
documents, information or explanation relating to its affairs as the Authority
may, at any time, by order in writing, require.
9. Restriction on Directors of Credit
Rating Companies.- [2][(1)] No
director of the credit rating company shall be a director of a corporate entity
or a business firm or a share holder holding 5% or more of any corporate entity
or business firm or in any other way interested in such an entity subject to
rating by the rating company[3][:
Provided that this
restriction shall not apply to a director of a rating company nominated as a
director of an entity by the Federal Government or a Provincial Government or
an institution which is directly or indirectly owned or controlled by the
Federal Government or a Provincial Government:
[1]
Substituted vide S.R.O. No.319(I)/2002 dated
June 12, 2002
[2]
Inserted vide S.R.O. No.319(I)/2002 dated June
12, 2002
[3]
Inserted vide S.R.O. No.319(I)/2002 dated June
12, 2002
Provided further that the director of the rating company
shall inform the Commission of such nomination within fifteen days of the
receipt of rating mandate from such entity together with an undertaking that he
shall not participate in the rating process of that entity; and
(2)
Neither any change in the shareholding of a rating
company shall be made nor the chairman and chief executive of a rating company
shall be changed without prior approval of the Commission, in writing.
(3)
The Commission may, after expiry of the minimum period
as prescribed in clause (b) of rule 3, order cessation of the applicability of
the provisions of rule 3 to a rating company where the Commission is of the
opinion that it would be in the interest of capital market so to do.]
10. Secrecy. No director, officer or employee of the credit
rating company shall communicate the information, acquired by him for use for
rating purposes, to any other person except where required under law to do so.
SCHEDULE
FORM I
[See rule 4 (1)]
FORM OF APPLICATION FOR REGISTRATION
AS
A CREDIT RATING COMPANY
To
The Corporate Law Authority, Government of Pakistan, Islamabad.
Dear Sir,
We hereby
apply for registration of
.................................................
(Name of Credit
Rating Company)
under rule 4 of the Credit Rating Companies Rules, 1995.
2. A
copy of the Memorandum and the Articles of Association is enclosed.
3. Necessary
information required in the annex to this Form is furnished. We undertake to
keep the information up to date at all times.
Yours
faithfully,
Signature
of the Chief Executive
Annex To Form I
1
|
Name,
address and telephone number(s) of the company.
|
............................................
|
2
|
Date
and place of incorporation.
|
............................................
|
3
|
Names
and addresses of promoters and directors.
|
............................................
|
4
|
Details
of joint venture or technical colla-boration agreement with an internationally
recognised credit rating company and a copy of such an agreement and
docu-mentary
|
|
evidence
in respect thereof.
|
............................................
|
|
5
|
Proposed
rating methodology and scale of rating.
|
.......................................
|
6
|
Whether
any director has been convicted of fraud or breach of trust.
|
............................................
|
7
|
Whether any director
has been adjudicated as insolvent.
|
............................................
|
8
|
Names and addresses of
senior management officers.
|
............................................
|
9
|
Whether any officer or
employee has been convicted of fraud or breach of trust.
|
............................................
|
10
|
Whether any senior
management officer has been adjudicated as insolvent or has suspended payment
or has compounded with his creditors.
|
............................................
|
11
|
Previous experience of
the promoters/directors in the credit rating field
|
............................................
|
12
|
Previous experience of
senior management officers.
|
............................................
|
Note :- (i) An
affidavit shall, from each promoter/director and officer in respect of
statement at serial Nos. 6 and 7, be submitted.
(ii) Certification by the
proposed chief executive of the company in respect of statement at serial Nos.
9 and 10 shall be submitted.
FORM II
(See rule 4(3)
CERTIFICATE OF REGISTRATION AS
CREDIT RATING COMPANY
GOVERNMENT OF PAKISTAN
CORPORATE LAW AUTHORITY
No.
Islamabad, the ..............199
The
Corporate Law Authority having considered the application for registration under rule 4 of the Credit
Rating Companies Rules, 1995 by
....................................................................
..........................................................................................
(Name of the credit rating company)
and being
satisfied that the said company is eligible for registration and that it would
be in public interest and in the
interest of the capital market so to do, hereby
grants, in exercise of the powers conferred by rule 4 of the
Credit Rating Companies Rules, 1995 registration to...................................................................
subject to the provisions of the Securities and Exchange Ordinance, 1969 (XVII
of 1969) and the rules made thereunder.
2. This
certificate of registration is valid up to ........................
Signature
of the Officer
FORM III
(See rule 5(1)
FORM OF APPLICATION FOR RENEWAL OF REGISTRATION
AS A CREDIT RATING COMPANY
To
Corporate Law Authority Government of Pakistan Islamabad.
Dear Sir,
We hereby apply for the renewal of the
registration of ................
......................................................(Name of the credit
rating company). under rule 5
of the Credit Rating Companies Rules, 1995.
2.
The certificate of
registration/ certificate of renewal is due to expire on
............
3.
Original receipt of
the treasury/bank for the fee of
Rs.............................being
the renewal fee is enclosed.
4.
It is requested that
the registration be renewed for the calendar year
...............
Yours faithfully,
Signature of the Chief Executive
FORM IV
(See rule 5(2)
CERTIFICATE OF RENEWAL OF REGISTRATION AS
CREDIT RATING COMPANY
GOVERNMENT OF
PAKISTAN
CORPORATE LAW AUTHORITY
No.
Islamabad, the ..............199
The Corporate Law Authority having
considered the application for renewal of registration under rule 5 of the
Credit Rating Companies Rules, 1995
by.........................................................
.......................................................(Name
of the credit rating company)and being satisfied that it would be in public
interest and in the interest of the capital market to renew the registration of
....................
.......................................................(Name
of the credit rating company)hereby grants, in exercise of the powers conferred
by rule 5 of the Credit Rating Companies Rules, 1995, certificate of renewal of
registration to the said company subject to the provisions of the Securities
and Exchange Ordinance, 1969 (XVII of 1969) and the rules made thereunder.
Signature of the Officer
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