On 18 February 2011, the Securities and Futures Ordinance (Amendment of Schedule 5) Notice 2011 (the "Notice") and the Securities and Futures (Financial Resources) (Amendment) Rules 2011 (the "Rules") were gazetted. The Notice amends the SFO to bring credit rating agencies under the regulatory regime of the SFC through the creation of a new Type 10 regulated activity under the SFO. The Rules set out the capital requirements for corporations to be licensed under the new Type 10 regulated activity. We last discussed the SFC's proposals for regulation of credit rating agencies in our October/November 2010 edition of the Hong Kong Financial Institutions Newsletter, a copy of which can be viewed HERE.
Subject to negative vetting by the Legislative Council, both the Notice and the Rules will come into operation on 1 June 2011. The SFC will also issue a new Code of Conduct for Persons Providing Credit Rating Services to assist the credit rating agencies and their rating analysts with compliance under the regulatory regime. The Notice and Rules may be viewed HERE and HERE respectively.