SFC achieves smooth transition for credit rating agencies falling within new regulatory regime

2 Jun 2011

The new regulatory regime governing credit rating agencies (CRAs) operating in Hong Kong became effective on 1 June 2011 (Note 1).

Under the new regime, CRAs and their rating analysts who provide credit rating services in Hong Kong, are required to be licensed for Type 10 regulated activity and are subject to supervision by the Securities and Futures Commission (SFC). In addition, Type 10 licensees are required to comply with the provisions of the Code of Conduct for Persons Providing Credit Rating Services and with other legal and regulatory requirements that are generally applicable to all SFC licensees.

On 21 April 2011, the SFC released a circular (Note 2) in which it invited CRAs and their rating analysts to submit their licence applications ahead of the new regulatory regime coming into force. On 1 June 2011, the SFC issued Type 10 licences to five CRAs (Note 3) and 156 of their rating analysts providing credit rating services in Hong Kong.

“We believe that this new regime, which is generally welcomed by CRAs, will raise market confidence,” said Mr Martin Wheatley, the SFC’s Chief Executive Officer. “To achieve a seamless transition for CRAs from an unregulated environment to a regulated one, we concentrated our efforts in recent weeks to ensure that all relevant licence applications submitted to the SFC were processed in time to permit the applicants to become licensed on 1 June 2011."

The new regulatory regime is designed to ensure that CRAs are regulated in Hong Kong in a manner that is generally consistent with the enhanced standards that, in recent times, have been adopted in a number of other jurisdictions.



1. The new regulatory regime came into effect on 1 June 2011 following (1) amendments made by the Financial Secretary to Schedule 5 of the Securities and Futures Ordinance by which a new type of regulated activity (Type 10: providing credit rating services) was created; and (2) amendments made by the SFC to the Securities and Futures (Financial Resources) Rules in relation to the capital requirements for licensed CRAs.

2. On 21 April 2011, the SFC issued a circular highlighting certain licensing requirements for CRAs and their analysts. It also published revised application forms and a new series of frequently asked questions on its website.

3. The five newly licensed CRAs are (in alphabetical order):

Page last updated : 1 Aug 2012