HK government mulls better credit rating rules

The government also plans to amend capital requirements for corporations licensed for Type 10 regulatory activity and connected matters.

The Government plans to add a new type of regulated activity to the Securities & Futures Ordinance to create a regulatory regime for credit rating agencies operating in Hong Kong. The amendments were published in the Gazette on Friday.

Under the regulatory regime, both corporate credit rating agencies in Hong Kong and their individual rating analysts will need to be licensed and be subject to the general obligations which are common to all people licensed or registered under the ordinance.

The amendment notice adds a new type of regulated activity - "Type 10: providing credit rating services" - to Schedule 5 of the ordinance. It also adds four related definitions for the purpose of Schedule 5 - "credit ratings", "debt securities", "preferred securities" and "providing credit rating services".

Capital requirements for corporations licensed for Type 10 regulatory activity and connected matters are also amended.

The amendment notice and amendment rules will be tabled at the Legislative Council on February 23, for launch on June 1.