S&P and Fitch seek Chinese branches

Source: Xinhua | 2018-05-28

GLOBAL rating firms are planning to set up independent branches in China as the country continues to open up its financial market.

Standard and Poor’s seeks to set up a stand-alone rating firm in China, while Fitch Ratings also plans to apply to Chinese regulators for such a license, said a report from Shanghai Securities News.

China’s central bank unveiled rules on inter-bank bond market credit ratings services by foreign rating firms last July, marking the first step in opening the domestic rating market to foreign players.

Previously, foreign rating agencies could only hold minority stakes in joint-venture operations in China.

The National Association of Financial Market Institutional Investors released documents in March giving equal treatment for domestic and overseas credit rating agencies in business registration.

Global rating firm Moody’s said the NAFMII’s new rules will facilitate bond market development, according to the report.

The changes in the regulatory landscape in China provide an opportunity to consider and evaluate how to best serve the needs of local and global capital markets going forward, the report quoted a Fitch spokesperson as saying.

China is one of the world’s largest bond markets. The bond market balance in trusteeship was 77.7 trillion yuan (US$12.2 trillion) at the end of April.