The Philippine Securities and Exchange Commission (SEC) has published updated memorandum circular text setting out revised accreditation and supervision requirements for credit rating agencies (CRAs), following its July consultation. The framework covers ratings of securities and their issuers, including corporate bonds, structured products and sukuk, and strengthens governance, analytical independence and public disclosure. The text leaves the circular number and execution date blank and does not establish that the rules have taken effect. The updated text specifies independent directors comprising at least 30% of the board, with no fewer than three members and an independent chair, rather than the majority proposed in July. Lead analyst rotation becomes a best efforts target of four years followed by a two-year cooling-off period, with deviations explained in the Annual Transparency Report. Business development and analytical teams must remain separate regardless of agency size, and directors and controllers cannot sit on rating committees. Methodologies must undergo review at least every three years. Public disclosures would include rating reports, historical default rates and rating transition data, while annual transparency reports would be due within four months of financial year-end. The standard minimum paid-up capital requirement is PHP 50 million at accreditation, rising to PHP 70 million three years later, subject to transitional arrangements. Existing CRAs would generally have 12 months from effectivity to comply and 18 months for board composition. Applicants filing within the first 12 months could enter with PHP 30 million, while all accredited CRAs would have to reach PHP 50 million within 36 months and PHP 70 million within 72 months of effectivity. Previously issued ratings would remain valid during transition, but ratings from agencies failing to comply afterward would cease to qualify for public offering or listing requirements. Issuers affected by suspension or revocation of an agency’s accreditation would have 120 days to obtain a replacement rating.
Philippine Securities and Exchange Commission sets out revised credit rating agency governance and capital requirements
The Philippine Securities and Exchange Commission has published updated credit rating agency rules following its July consultation, although the circular text remains unnumbered and undated. It specifies at least 30% independent board membership, a best efforts analyst rotation target and expanded rating disclosures. Transitional arrangements phase in capital requirements of PHP 50 million and PHP 70 million over 36 and 72 months from effectivity.