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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Laws
Rulebook Modules
Conduct of Business Module (COB) [VER32/02-19]
Sourcebook Modules
Consultation Papers
Policy Statements
DFSA Codes of Practice
Amendments to Legislation
Media Releases
Notices
Financial Markets Tribunal
Archive

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  • COB 8.8 Disclosure and presentation of Credit Ratings

    • General Disclosure

      • COB 8.8.1

        (1) Subject to the confidentiality requirements applicable to a Credit Rating AgencyG , it must ensure that its Credit RatingsG :
        (a) are published promptly, and as far as practicable, on a nonselective basis and free of charge;
        (b) contain sufficient information to enable users of such Credit RatingsG to understand how the Credit RatingG was reached, including information relating to the methodologies, models and key underlying assumptions used;
        (c) contain a clear statement if the Credit RatingG is initiated by the Credit Rating AgencyG on its own initiative (unsolicited), and information relating to the Credit Rating Agency'sG policy relating to providing unsolicited Credit RatingsG ;
        (d) contain sufficient information about the historical default rates of its Credit RatingsG which are of the same category as the Credit RatingG being published so that interested parties can understand the historical performance of its Credit RatingsG ; and
        (e) include any other information relevant to the particular Credit RatingG , as specified in this module.
        (2) A Credit Rating AgencyG must ensure that any press release which accompanies a Credit RatingG contains key elements underlying the Credit RatingG .
        (3) Before publishing a new or an updated Credit RatingG or withdrawing a Credit RatingG , the Credit Rating AgencyG must, to the extent practicable and appropriate, give to the Rating SubjectG sufficient advance notice to enable that PersonG to draw to the attention of the Credit Rating AgencyG any factual errors on which the Credit Rating AgencyG may have based the relevant Credit RatingG .
        (4) Subject to the confidentiality requirements applicable to a Credit Rating AgencyG , any information which the Credit Rating AgencyG is required to publish pursuant to any Rules must also be made available on the website of the relevant Credit Rating AgencyG .
        [Added] DFSA RM97/2012 (Made 24th July 2012) [VER20/07-12]

        • COB 8.8.1 Guidance

          In relation to Rule 8.8.1(3), a Credit Rating AgencyG should inform the Rating SubjectG at least 12 hours before publication of a new Credit RatingG or an update or withdrawal of an existing Credit RatingG of the principal grounds on which such Credit RatingG is based in order to give the Rating SubjectG an opportunity to draw to the attention of the Credit Rating AgencyG any factual errors. The Rating SubjectG has the meaning given to it in GEN Rule 2.27.1(3) and should be read in conjunction with COB Rule 8.1.1(2).

          [Added] DFSA RM97/2012 (Made 24th July 2012) [VER20/07-12]

    • Specific Disclosure - Fees and Charges

      • COB 8.8.2

        (1) A Credit Rating AgencyG must include in its announcements relating to Credit RatingsG and its annual report the general nature of its arrangements relating to fees and charges with, or relating to, the Rating SubjectG including:
        (a) whether the Credit Rating AgencyG or any member of its GroupG receives any fees, charges or other monetary benefits which are unrelated to the provision by the Credit Rating AgencyG of its Credit RatingsG , and if so, the proportion of such benefits relating to the aggregate fees and charges in respect of the provision of Credit RatingsG ; and
        (b) if the Credit Rating AgencyG receives 10% or more of its aggregate annual revenue from a single Rating SubjectG or its Related PartyG , information about that source.
        (2) Where a Credit Rating AgencyG is a member of a GroupG , the 10% aggregate annual income referred to in (1)(b) may be calculated by aggregating the net revenue of all Credit Rating AgenciesG within the GroupG .
        [Added] DFSA RM97/2012 (Made 24th July 2012) [VER20/07-12]

    • Specific Disclosure – Structured financial products

      • COB 8.8.3

        A Credit Rating AgencyG must, where the Rating SubjectG is a structured financial product disclose in its Credit RatingsG whether the Relevant InformationG is made publicly available by the Rating SubjectG , or whether all, or some of, such information remains non-public.
        [Added] DFSA RM97/2012 (Made 24th July 2012) [VER20/07-12]

        • COB 8.8.3 Guidance

          1. The information which a Credit Rating AgencyG provides relating to structured financial products should include sufficient information such as information relating to the profit and loss statement and cash flow analysis to enable users of the Credit RatingsG to understand the basis of the Credit RatingG . Such information should also include the degree to which, in accordance with its analysis, the Credit RatingG is sensitive to changes in market conditions.
          2. A Credit Rating AgencyG should differentiate ratings of structured finance products from traditional corporate bond ratings, preferably through a different rating symbology. A Credit Rating AgencyG must also disclose how this differentiation operates.
          3. A Credit Rating AgencyG should use reasonable efforts to encourage the Rating SubjectG to disclose to the public all Relevant Information to enable investors and users of the Credit RatingsG to conduct their own due diligence relating to that product.
          [Added] DFSA RM97/2012 (Made 24th July 2012) [VER20/07-12]