Rating agencies – НКЦПФР|НАЦІОНАЛЬНА КОМІСІЯ З ЦІННИХ ПАПЕРІВ ТА ФОНДОВОГО РИНКУ

Credit rating (Rating) is an activity on providing professional services in the securities market, aimed at determining the creditworthiness of the rating object that can be carried out by a rating agency.

A person acquires the right to define ratings from the date of the issuance of the Certificate on Inclusion into The State Register of Authorized Rating Agencies.

Rating methodology and rating procedure, as well as changes thereto, are approved by the authorized rating agency and sent to the Commission within 5 working days after their approval.

An Authorized Rating Agency must:

carry out activities in accordance with the Rules approved by the Commission, rating methodology and rating procedure;
conduct an independent rating based on the National Scale;
carry out the updating of the assigned ratings;
carry out activities for the rating assessment and its updating on the basis of a contract between the authorized rating agency and the rating entity (hereinafter referred to as the contract).
keep records of concluded contracts and retain them in the agency for at least five years after the fulfillment of mutual obligations;
submit to the Commission information in volumes, forms and within the period specified by the regulatory act of the Commission, which establishes the procedure for the submission of information by authorized rating agencies;
within 90 calendar days after the expiration of each half of a calendar year, post on its own webpage the report for the previous half of a calendar year regarding the number of defaults under the rating levels of the National Scale, which indicates the number of issuers having an active credit rating of the agency on the date of the default, the obligations of which were defaulted in the reporting half of a calendar year, broken down by rating levels (uaAAA, uaAA, uaA, uaBBB, uaBB, uaB, uaCCC, uaCC, uaC), which included ratings of the respective issuers (or ratings of certain defaulted obligations) 6 months before the date of the default;
within 6 calendar months from the default date of the issuer with a long-term investment rating of credit level, submit to the Commission and place on its own webpage an explanation of the reasons for such a default.

Rating agencies that do not have the status of an authorized rating agency and are interested in obtaining it have the right to send written requests to the Commission regarding the necessity of conducting the competition.

The initiator of the contest is the Commission. The competition is held at least once a year. In case of receipt of not less than two written appeals of rating agencies regarding the necessity of conducting the competition, it is held outright.

The personnel of the competitive commission and changes to its composition are approved by the corresponding decision of the Commission. The quantitative composition of the competition commission is not less than 7 people.

The competition commission consists of representatives of state authorities, professional participants in the securities market and their associations, issuers, scientific institutions, while the number of representatives of professional securities market participants and their associations, issuers, scientific institutions is not less than 1/3 from the quantitative composition of the competitive commission.

The meeting of the competition commission is eligible provided that at least 2/3 of the members of the competitive commission participate in it.

Applicants who have confirmed in writing their wish to take part in the competition, have submitted the relevant documents and meet the following criteria are admitted to the competition:

are residents;
provide professional services and directly carry out the determination of credit ratings (rating) or information and analytical services related to the provision of credit rating activities;
when determining the rating, the definition of which is mandatory by law, use the National Rating Scale;
have official web sites with free access to users;
have experience of at least 1 year in the specified field of activity and a list of determined and published credit ratings for national economic entities;
have a registered capital of at least 2500 minimum wages, of which at least 50 per cent are paid in cash;
among related parties (in the meaning defined by the Law of Ukraine “On Financial Services and State Regulation of the Financial Services Market”) persons associated with participants in financial services markets and do not determine their credit ratings.

You can find out more about the terms of participation in the contest, the procedure for conducting it and the consideration of disputes.

Rating ratings, which are required by law to be obtained, have the right to determine exclusively authorized rating agencies and / or international rating agencies. International rating agencies must be recognized by the National Securities and Stock Market Commission.

The following issuers require rating assessment:

enterprises in the authorized capital of which there is a state share;
enterprises of strategic importance to the economy and security of the state;
enterprises that occupy a monopoly (dominant) position.

The determination of the rating, unless otherwise provided by law, requires all types of debt and mortgage-backed securities that are not distributed among the founders or among a predetermined range of persons and may be distributed through public placement, purchased and traded on the stock exchange, with the exception of government securities and securities issued by the State Mortgage Institution.

If an assigned rating is not satisfied with the rating entity and it has reason to believe that during the rating procedure significant factors influencing the rating assessment were not taken into account, the rating entity has the right to submit within 5 working days after receiving rating rating a substantiated application and documents to the appropriate authorized body of the authorized rating agency.

After reviewing the application and documents, the relevant authorized body of the authorized rating agency within 5 working days after receipt of the documents for appeal takes a decision on the assignment or updating of the rating assessment which is not subject to further appeal in the authorized rating agency, however it may be appealed in accordance with the procedure established by the legislation.

Authorized rating agencies submit (send) annual information to the central office of the Commission by March 1 of the year following the reporting year. Irregular Information is sent to the Central Office of the Commission within ten working days of the date of the action.

The submission of information by authorized rating agencies to the Commission’s central office is carried out in the form of electronic documents. The information is compiled in accordance with the description of sections and schemas of XML files identified by a separate normative-technical document.

Annual Information consists of the following sections:

cover sheet
basic information about the authorized rating agency with indication of information on related persons of the authorized rating agency and their relation to the participants of the financial services markets, as well as regarding their credit rating (in an arbitrary form);
information on ownership of securities (shares, units)
information about the list of issuers for which the rating was made;
information about the list of securities for which the rating is made;

The annual information is attached to the financial statements in accordance with the legislation of Ukraine.

Irregular information from the rating agency is:

information on changes in the list of issuers for which the rating has been made.
information on changes in the list of securities for which the rating has been made.

More information on disclosure by rating agencies can be found at the link.

Service	Fee, uah	The term