Lehman Brothers

Licence plan to control rating agencies

PUBLISHED : Tuesday, 20 July, 2010, 12:00am
UPDATED : Tuesday, 20 July, 2010, 12:00am

In the wake of the financial crisis and the Lehman Brothers minibonds debacle, the Securities and Futures Commission has proposed changing the law to make credit rating agencies operating in Hong Kong apply for a licence from the regulator. This follows the international trend to ensure ratings agencies adhere to a code of conduct that includes disclosing their fee structure and potential conflicts of interest, and informing the public immediately of any change of rating of any products or bonds. There will be a month-long consultation on the proposal.