China Securities Regulatory Commission, Issue of Credit Rating Reports by Credit Rating Institutions on Securities Company Bonds Guidelines

Issued: August 29 2003
Effective: October 8 2003

Main contents: Before issuing the report, the institution must carry out due diligence and confirm that the data, information and results are objective, accurate, fair and timely (Article 4). The institution must maintain complete file records of the rated bonds that are subject to examination by the regulatory department (Article 7). Part Two of the Guidelines specifies the contents and format of a rating report, which include an outline, statements, main contents, follow-up rating arrangements and appendices. The analytic conclusion in the main contents must at least include such contents as brief analyses of the issuer, the rated bond, the securities industry and may indicate a "special risk reminder" if necessary (Article 13). Follow-up rating matters must be specified in the first rating report. Follow-up ratings shall include regular as well as ad hoc follow-up ratings (Article 18). When a significant event in relation to the rated bond occurs, an ad hoc follow-up rating report shall be issued and submitted to the China Securities Regulatory Commission (Article 19). A follow-up rating report shall give an analysis on the changes in the external business environment, internal operation and financial condition of the issuer as well as the risk factors mentioned in the previous rating report, and explain the impact on the rated bond and whether any adjustment on the original credit rating should be made (Article 23).
Related legislation: PRC Securities Law (Amended), OCt 27 2005, CLP 2006 No.1 p31