The regulatory landscape for CRCs is experiencing a shift globally in terms of ease of doing
business and promoting rating business without compromising quality of ratings. Pursuant to the
International Organization of Securities Commissions’ (IOSCO) Code of Conduct Fundamentals for
Credit Rating Agencies of March 2015, a number of jurisdictions have undertaken various regulatory
measures to strengthen oversight on CRCs and to raise the underlying standards. In the same spirit,
the Securities and Exchange Commission of Pakistan (“The Commission”) reviewed the existing
regulatory framework for CRCs and has issued Credit Rating Companies Regulation, 2016.
These regulations encompasses three broad areas:
1. Licensing Requirements
2. Restrictions, Duties and Obligations of Credit Rating Companies.
3. Accounting and Financial Records
PACRA appreciates SECP’s efforts and finds the regulations a step in the right direction for the
capacity building of CRCs. The regulations are expected to build investor confidence in CRCs in the
country, and will improve standards of the rating process in line with the international credit
rating companies.
Rating Definitions and Symbols
Policies/Procedures
| Sr. No. | Title | Date |
|---|---|---|
| 1 | Whistleblower Protection | May-2024 |
| 2 | Treatment of Confidential Information | May-2024 |
| 3 | Review of Ratings | May-2024 |
| 4 | Withdrawal & Suspension of Ratings | May-2024 |
| 5 | Charging Fee | May-2024 |
| 6 | Investment and Trading in Securities by Employees of PACRA | May-2024 |
| 7 | Announcement / Dissemination of Ratings | May-2024 |
| 8 | Rotation of Analyst | May-2024 |
| 9 | Solicited, Un-Solicited & Private Ratings | May-2024 |
Criteria/Methodologies
Codes of Conduct
| Sr. No. | Title | Date |
|---|---|---|
| 1 | Code of Conduct | BoD | Dec-2023 |
| 2 | Code of Conduct | Employee | Dec-2023 |
| 3 | Code of Conduct | RC | Dec-2023 |
Rating Transitions/Movements
| Sr. No. | Title | Date |
|---|---|---|
| 1 | Private Ratings | Movement | Feb-2024 |
| 2 | Rating Transition Study | CY09-CY18 | Jan-2019 |
| 3 | Rating Transition Study | CY10-CY19 | Jan-2020 |
| 4 | Rating Transition Study | CY11-CY20 | Jan-2021 |
| 5 | Rating Transition Study | CY11-CY21 | Jan-2022 |
| 6 | Rating Transition Study | CY11-CY22 | Jan-2023 |
| 7 | Rating Transition Study | CY11-CY23 | Jan-2024 |
| 8 | Switch Report | Rating Movement between two CRAs | Feb-2024 |
Industry Specific Studies
Industry analysis is a key component of credit rating process, as entities do not
operate in a vacuum. Economic environment, regulatory policies, demand and supply
dynamics, competition, energy situation, security threats, and other factors all play a
significant role that can impact an entity’s performance. Hence, it is paramount to be
fully cognizant of how the industry is behaving and what can be expected in the future.
PACRA assesses the level of credit risk prevalent in various industries. This is an
ongoing exercise to determine short-term and long-term prospects of the industry. We
establish correlation between the industry and entities emanating out of it. Although
industry level analysis is conducted on all the sectors in PACRA’s rating universe, we
traditionally publish our industry reports (in public domain) for sectors that have five
or more clients. This covers close to two-thirds of our outstanding ratings.
The new code of conduct requires rating agencies to publish industry reports for all the
sectors. In compliance with the new code, PACRA will publish its opinion on all
industries within its rating universe starting July 01, 2014. These could be in form of
studies, reviews, update or snapshots.
Best Practices Guiding Documents
| Sr. No. | Title | Date |
|---|---|---|
| 1 | ACRAA Code of Conduct Fundamentals for Domestic Credit Rating Agencies | Apr-2011 |
| 2 | IOSCO Code of Conduct Fundamentals for Credit Rating Agencies | Aug-2020 |
| 3 | IOSCO Code of Conduct Fundamentals for Credit Rating Agencies | May-2008 |
| 4 | PACRA Compliance Status on ACRAA | Jan-2013 |
| 5 | SECP Code of Conduct for Credit Rating Companies/Agencies | Jan-2014 |
| 6 | SECP Code of Corporate Governance | Mar-2012 |
| 7 | SECP | Code of Corporate Governance | Aug-2020 |
| 8 | SECP | CRC regulations 2016 | Aug-2020 |
| 9 | Summary of Order Passed by the Appellate Bench, SECP | Jul-2019 |
Financial Statement
| Sr. No. | Title | Date |
|---|---|---|
| 1 | Financial Statement | FY23 | Jun-2023 |
Directors Report
| Sr. No. | Title | Date |
|---|---|---|
| 1 | Directors Report | FY23 | Oct-2023 |