On 6 Aug. 2021, the People's Bank of China and other four authorities jointly released the “Notice on Promoting the Healthy Development of the Credit Rating Industry in the Bond Market”(关于促进债券市场信用评级行业健康发展的通知) ("the Notice"), which will enter into force on 6 Aug. 2022.
The Notice sets forth clear requirements for credit rating agencies in terms of strengthening the development of the rating methodology system, improving the corporate governance and internal control mechanism, and intensifying information disclosure. Also, the Notice stresses the need to optimize the rating ecology and tighten the supervision and administration of credit rating agencies. Besides, the Notice calls for intensifying checks over the rating quality of credit rating agencies and compliance of operations throughout the whole process, with particular attention paid to certain circumstances such as the rating differentiation being apparently lower than the average level in the industry, the delayed follow-up rating, the rating being “jumping” to the other level, and the rating result being adjusted upwards after the replacement of a credit rating agency.
Cover Photo by Jonas Lee (https://unsplash.com/@1eemingwell) on Unsplash
Contributors: CJO Staff Contributors Team