regulatory disclosures

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.

Codes of Conduct

Sr. No. Title Date
1 Code of Conduct | BoD Oct-2020
2 Code of Conduct | Employee Oct-2020
3 Code of Conduct | RC Oct-2020

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.


Industry Specific Studies

Fee Structure


Fee Structure

Shareholding


Ownership

Governance


Governance