ADVOKS GLOBAL · KENYA
The Capital Markets (Credit Rating Agencies) Regulations
12. Agreements with clients
Edition: 2023-12-15 · In force
12. Agreements with clients
A credit rating agency shall enter into a written agreement with each client and issuer whose securities it intends to rate and every such agreement shall include the following provisions—(a)the rights and liabilities of each party to the agreement in respect of the rating of the security or issuer;(b)the fee charged by the credit rating agency;(c)the obligation of the client to co-operate with the credit rating agency in order to enable the credit rating agency to conduct periodic reviews of the rating during the tenure of the security or issuer, as may be applicable;(d)the obligation of the client to provide true, adequate and timely information to enable the credit rating agency to arrive at, and maintain, a true and accurate rating of the security or issuer;(e)the credit rating agency shall disclose to the client the rating assigned to the client or security issued by the client annually, whether or not the rating is accepted by the client;(f)the client shall disclose in an offer document—(i)the rating assigned to the issuer of security issued by the client, as the case may be, by any other credit rating agency during the preceding three years; and(ii)any rating given in respect of the issuer or security issued by the client, as the case may be, by any other credit rating agency that has not been accepted by the client;(g)the client shall give explicit consent to the credit rating agency to obtain the details related to the client's existing or future borrowing of any nature, repayment and delay or default, if any, of any nature, in servicing the borrowing, from the lender or any other statutory or non-statutory organisation maintaining any such information to enable the credit rating agency to have timely information and consider the impact of such information on the rating assigned by the credit rating agency; and(h)the client shall take reasonable steps to give each investor information needed to enable the investor to make a balanced and informed investment decision, in a comprehensible form, after receiving the credit rating.