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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Laws
Rulebook Modules
Conduct of Business Module (COB) [VER33/07-19]
Sourcebook Modules
Consultation Papers
Policy Statements
DFSA Codes of Practice
Amendments to Legislation
Media Releases
Notices
Financial Markets Tribunal
Archive

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  • Policies and procedures

    • COB 8.7.1

      (1) A Credit Rating AgencyG must, subject to (2), have adequate policies, procedures and controls to ensure that it discloses in a timely manner:
      (a) its Credit RatingsG and any updates thereof;
      (b) its policies for distributing Credit RatingsG and updates thereof;
      (c) the methodologies and models used and key assumptions made in preparing its Credit RatingsG and any updates thereof; and
      (d) any other significant element relating to (a), (b) or (c) above.
      (2) A Credit Rating AgencyG is not required to disclose information where the information is subject to confidentiality requirements.
      [Added] DFSA RM97/2012 (Made 24th July 2012) [VER20/07-12]

      • COB 8.7.1 Guidance

        1. The level of detail required in the disclosure of information concerning methodologies, models and key assumptions should be such as to give adequate information to the users of Credit RatingsG to enable them to perform their own due diligence when assessing whether, or to what extent, reliance can be placed on those Credit RatingsG (see COB Rule 8.8.1). Disclosure of information must not, however, reveal confidential information of, or relating to, the Rating SubjectG or its GroupG pursuant to COB Rule 8.9.1.
        2. The information referred to in Guidance No. 1 should generally include the meaning of each rating category and the definition of default or recovery, and the time horizon the Credit Rating AgencyG used when making a Credit RatingG .
        3. A Credit Rating AgencyG should adequately and clearly disclose applicable risks which may affect a Credit RatingG , including a sensitivity analysis of the relevant assumptions and an explanation of how various market developments affect the parameters built into the methodologies and models and may influence or impinge on the Credit RatingG (for example volatility).
        4. If the nature of a Credit RatingG or other circumstances make a historical default rate inappropriate or otherwise likely to mislead investors, the Credit Rating AgencyG should provide appropriate clarifications.
        5. A Credit Rating AgencyG should provide information to assist users of its Credit RatingsG to develop a greater understanding of what a Credit RatingG is, and the limitations on the use of Credit RatingsG with respect to the particular type of financial product that the Credit Rating AgencyG rates. A Credit Rating AgencyG should clearly indicate the attributes and limitations of each Credit RatingG , and the limits to which the firm verifies information provided to it by the Rating SubjectG , its Related PartyG or any external source.
        [Added] DFSA RM97/2012 (Made 24th July 2012) [VER20/07-12]