NAIROBI, Kenya August 17 – The Capital Markets Authority (CMA) has reviewed guidelines for credit rating agencies, in a bid to improve best practice in the conduct of sovereign or corporate ratings in Kenya.
As a result of the review, the draft Capital Markets (Credit Rating Agencies) Regulations 2022 have been prepared in accordance with section 12(1)(h) of the Capital Markets Act, Chapter 485A of the Laws of Kenya.
The draft regulations submitted for stakeholder comment are intended to replace the current guidelines on licensing and registration of credit rating agencies issued in November 2001.
The review is also intended to comply with the requirements of the Statutory Instruments Act.
The draft regulations will detail the licensing and recognition process for credit rating agencies, the rating process and oversight as well as the disclosure of rating definitions and rationales.
“The regulations will also provide for investor protection and an increased level of oversight of credit rating agencies by the regulator,” CMA said in a public notice.
A credit rating agency is an organization that assesses the relative creditworthiness of issuers of securities and assigns ratings to those securities.
Currently, CMA has approved the registration and operation of five credit rating agencies, including Global Credit Rating Company (GCR), Agusto & Company Limited, Metropol Corporation Limited, AM Best Rating Services Limited and CARE Ratings.
The regulator is expected to receive stakeholder comments on the draft regulations until September 16.