In line with its efforts to strengthen the capital market and as part of subsidiary legislation under the Securities Act, 2015, the Securities and Exchange Commission of Pakistan has accorded approval to the Credit Rating Companies Regulations, 2016.
The regulations have introduced a new regulatory regime for the CRCs on the lines of best international practices, and have removed the shortcomings in the existing CRC regime.
Earlier, comprehensive consultation sessions were held with all the key stakeholders. The regulations were finalised after the consultation sessions. In addition to incorporating feedback that had been received earlier during public consultation, the new regulatory regime introduces various new requirements and strengthens the existing requirements for the CRCs to help achieve the objective of investor education. It also ensures continuity of business of the existing CRCs through a phased implementation of certain new requirements.
A significant aspect of the new regulatory regime is the introduction of detailed licensing regime for the CRCs with fit and proper criteria for promoters, chief executives, directors and senior management officers.
To promote new entrants into the market, the financial resource requirement has also been introduced in the new regulatory framework, while to promote corporate norms and continuity in the business, categories of shareholders have been prescribed with a cap on their shareholdings.
