For the purposes of further promoting the interconnection of the bond market, and promoting the regulated development of the credit rating industry, in accordance with the Law of the People's Republic of China on the People's Bank of China, the Securities Law of the People's Republic of China and other relevant provisions, the issues concerning the provision of bond rating services (hereinafter referred to as “rating services”) by credit rating agencies on the interbank bond market and the stock exchange bond market are hereby announced as follows:
I . Promoting the gradual unification of the qualifications to provide rating services on the interbank bond market and the stock exchange bond market
(1) The credit rating agencies that have provided rating services on the interbank bond market or the stock exchange bond market may, according to their own circumstances, apply for providing rating services also on the stock exchange bond market or on the interbank bond market. The People's Bank of China (“PBC”), the China Securities Regulatory Commission (“CSRC”), and the National Association of Financial Market Institutional Investors (“NAFMII”) will establish green channels to achieve the mutual recognition of credit rating agencies' qualifications to provide credit rating services.
(1) Where a credit rating agency is to provide rating services on both the interbank bond market and the stock exchange bond market, its domestic incorporated institution or any of its branch offices shall, before providing services, submit an application to the CSRC and the NAFMII after undergo the recordation formalities with the branch offices at or above the level of a central sub-branch of the PBC in a capital city of a province (autonomous region), and the PBC, the CSRC and the NAFMII will conduct examination or make registration in a collaborative manner.
II . Different incorporated credit rating agencies under the same actual controller shall be encouraged to be integrated by market-oriented means such as merger and reorganization to better gather talents and technical resources and boost the credit rating agencies to become bigger and stronger.
The rating results issued by credit rating agencies before the integration may continue to be used, and the integrated credit rating agencies shall fulfill their obligations of rating tracking and information disclosure, among others. The integrated credit rating agencies shall unify the technical methods for rating, rating business rules, rating standards, rating reports and other contents.
III . Strengthening the regulation of credit rating agencies and the sharing of regulation information in credit rating industry
(1) The PBC and its branch offices and the CSRC and its local offices shall have the right to conduct supervisory inspection on the credit rating agencies that provide rating services on the bond market by on-site and off-site means, among others, and the NAFMII and the Securities Association of China shall have the right to conduct self-regulatory investigations on credit rating agencies, and may, if necessary, conduct joint investigations on credit rating agencies. Whoever violates laws, regulations or regulatory provisions shall be punished according to the law by the PBC or any of its branch offices, and the CSRC or any of its local offices, and whoever violates self-regulatory rules shall be given disciplinary actions by relevant self-regulatory organizations according to the law.
(2) The market-oriented evaluation of credit rating agencies oriented by investors shall be gradually conducted in a unified manner.
(3) The PBC, the CSRC and relevant self-regulatory organizations shall establish and improve the information sharing mechanisms for rating regulation and self-regulation administration, and share information on the routine administration of credit rating agencies, inspection results, administrative penalties and self-regulatory disciplinary actions, among others.
IV . Credit rating agencies shall establish and improve corporate governance mechanisms and internal control and business systems, prevent conflicts of interest, abide by professional ethics, fully disclose the credit risk of the evaluated objects under the principles of independence, objectivity and impartiality, and take all necessary measures to ensure the quality of the rating.
Credit rating agencies that provide services on both the interbank bond market and the stock exchange bond market shall unify rating standards, and maintain the consistency and comparability of rating results.
The People's Bank of China
China Securities Regulatory Commission
September 4, 2018
