Credit rating company is a regulated securities activity under the Securities Act, 2015. Credit Rating Companies (CRC) are an integral component of a vibrant and healthy debt capital market. CRCs are regulated under the Act read with the Credit Rating Companies Regulations, 2016 (CRC Regulations), promulgated on August 5, 2016. At present two CRCs are functioning in Pakistan i.e. Pakistan Credit Rating Agency Limited (PACRA) and VIS Credit Rating Company Ltd.
PERMISSION TO FORM A CREDIT RATING COMPANY
An application for permission to form a credit rating company by persons meeting the eligibility criteria as mentioned in regulation 4 of the CRC Regulations shall be made to the Commission on Form ‘I’ along with all the documents specified in Annexures to Form-I and receipt evidencing payment of non-refundable processing fee as specified in Schedule-I of the CRC Regulations. The Commission on being satisfied that the person seeking permission to form a credit rating company has fulfilled the criteria in terms of the regulations may permit by an order in writing to establish a credit rating company.
The permission granted by the SECP to form a credit rating company shall be valid for a period of six months unless extended for a maximum period of further three months under special circumstance, on the application of the promoters made before the expiry of initial six months.
GRANT OF LICENCE
The Company, subject to compliance with the provisions of Act, shall made an application for grant of licence as credit rating company under regulation 6 of the CRC Regulations on Form ‘II’ along with all the documents specified in Annexures to Form-II and receipt evidencing payment of non-refundable fee as specified in Schedule I of the CRC Regulations.
The Commission may after making necessary inquiries and after obtaining such further information, as it may consider necessary, and if it is satisfied that each of its promoters or sponsors, directors, chief executive and chairman of the board of directors fulfill the terms and conditions mentioned in the Fit and Proper criteria given in Annexure C grant licence as per Form A, subject to compliance with the conditions of the grant of licence as specified in regulation 6.
RENEWAL OF LICENCE
For renewal of its licence, the Credit Rating Company shall, one month prior to the date of expiry of its licence, apply to the Commission on Annexure A along with all the documents specified in Annexure B providing therewith a receipt evidencing payment of a non-refundable renewal fee as prescribed in Schedule I.
The Commission if satisfied that the applicant continues to meet the requirements for licensing and is eligible for renewal of licence shall renew the licence for one year and issue a certificate of renewal of licence to the Applicant on Form B of the CRC Regulations.
The detailed procedure for grant /renewal of licence and Annexures and Forms as mentioned above may be seen in Credit Rating Companies Regulations, 2016.