•  
• Tweet
•  
•        Print
•  
•         Track Keywords
•  
• 

Opalesque Exclusive: Japan gets involved with regulations of credit rating agencies The Japan FSA published a "Report by the First Subcommittee of the Sectional Committee on Financial System of the Financial System Council: Toward Building Reliable and Vibrant Markets" which focuses on:

(i) A framework for regulation of credit rating agencies;

(ii) Alliances among financial instruments and commodity exchanges; and

(iii) Review of the disclosure systems.

The Committee is very concerned to to be involved with the new regulations of the credit agencies and suggests to define "Acts to be prohibited" to protect the investors: "Regarding matters that require a particularly high level of integrity from the viewpoint of ensuring the independence of credit rating agencies, preventing conflicts of interest and ensuring the fairness of the rating process, it is necessary to prohibit certain acts, rather than merely leave agencies to decide how to act on their own through their establishing control systems.

Specifically, in cases where a credit rating agency has a close relationship with the issuers of the financial instruments to be rated (e.g. cases where an analyst holds financial instruments to be rated), it is necessary to prohibit the ratings of such financial instruments.

The United States and Europe are currently considering introducing and/or strengthening regulation of credit rating agencies. Above all, with respect ......................

To view our full article Click here