This newspaper (chinatimesnet.CN) reporter Liu Jia reported from Beijing.
On the day of the Northern New Year, the central bank announced a number of fines.
On February 2, the head office of the People's Bank of China announced the first batch of administrative penalties in 2024, involving six rating agencies, including China Chengxin International Credit Rating Co., Ltd., United Credit Rating Co., Ltd.***Shanghai New Century Credit Rating Investment Service*** China Securities Pengyuan Credit Rating Co., Ltd.*** Far East Credit Rating*** and S&P Credit Rating (China)**.
In terms of the amount of penalties, the rating agencies were fined from more than 7 million yuan to more than 2 million yuan, with a total fine of more than 34 million yuan.
According to public information, the types of illegal acts of relevant institutions mainly include failure to carry out credit rating business in accordance with statutory rating procedures and business rules, violation of independence requirements, violation of the principle of consistency, etc. In response to the relevant violations, the central bank also issued warnings and fines to the relevant institutions and the relevant responsible persons at the time. The date of the administrative penalty decision is November 7, 2023.
Industry insiders told the "China Times" reporter that due to the delay in the disclosure of fines, the time of administrative punishment does not mean that the violation occurred in the same year, and it is possible that the relevant investigation or inspection work has been carried out before November 2023, which is a punishment for previous violations. At the same time, a high fine cannot simply be equated with a high incidence of violations within a limited time.
Six rating agencies were fined a total of 34.46 million yuan
According to the public information, China Chengxin International Credit Rating Company was fined the most, reaching 76850,000 yuan. The types of violations include failure to file as required; Failure to carry out credit rating business in accordance with statutory rating procedures and business rules; breach of independence requirements; violation of the principle of consistency; There are 5 types of violations in violation of the requirements for the management of credit rating practitioners.
At the same time, Wang Moufang, then vice president of China Chengxin International Credit Rating Co., Ltd., was warned and fined 30,000 yuan for "failing to carry out credit rating business in accordance with statutory rating procedures and business rules".
Ren Mouhong, then vice president of China Chengxin International Credit Rating Co., Ltd., was convicted of "failing to carry out credit rating business in accordance with statutory rating procedures and business rules; violated the independence requirement", was warned and fined 130,000 yuan.
The second largest penalty amount is the joint credit rating shares*** for failing to go through the filing in accordance with the regulations, failing to carry out the credit rating business in accordance with the statutory rating procedures and business rules; breach of independence requirements; Failure to disclose information in accordance with regulations or disclosure of false information; A total of 5 types of violations of the principle of consistency were warned by the central bank and fined 7.41 million yuan. At the same time, Wan Mouwei, then president of United Credit, was warned and fined 270,000 yuan.
Followed by Shanghai New Century Credit Appraisal Investment Service*** due to failure to handle the filing in accordance with the regulations; A total of 3 types of violations of the independence requirement and the principle of consistency were warned by the central bank and fined 726750,000 yuan. At the same time, Ding Mouliang, then director and executive vice president of Shanghai New Century Credit Rating Investment Service, was warned and fined 100,000 yuan for being responsible for violating the independence requirement.
CSI Pengyuan Credit Appraisal Shares*** was warned and fined 6009.95 million yuan, the main violations include: failure to file in accordance with regulations; Failure to carry out credit rating business in accordance with statutory rating procedures and business rules; breach of independence requirements; Failure to submit a report to the competent department of the credit rating industry or its dispatched agency in accordance with regulations; violation of the principle of consistency; Failure to manage rating business files in accordance with regulations, a total of 6 types of violations. Qin Mouchao, then executive vice president of China Securities Pengyuan, and Huang Mouchao, vice president of China Securities Pengyuan, were warned by the central bank and fined 30,000 yuan and 90,000 yuan respectively.
The Far Eastern Credit Appraisal was fined 397 for failing to handle the filing in accordance with the regulations40,000 yuan.
S&P Global (China)** was warned and fined RMB2.12 million for major violations including: failing to conduct credit rating business in accordance with statutory rating procedures and business rules; Failure to submit a report to the competent department of the credit rating industry or its dispatched agency in accordance with regulations; violation of the principle of consistency; At the same time, Eastham, then director of rating analysis at S&P Global (China)**, was warned and fined $30,000 for failing to conduct credit rating business in accordance with statutory rating procedures and business rules.
The central bank's penalties for these rating agencies are mainly due to violations of independence requirements, the principle of consistency and the failure to file as required. Bai Wenxi, vice chairman of the China Enterprise Capital Alliance, told the China Times that rating agencies, as a kind of intermediaries, can be said to be one of the gatekeepers of the market-oriented supervision system, so they must uphold the principle of independence and consistency and meet the requirements of industry administrative supervision.
According to Zhou Yiqin, an expert in financial regulatory policies and the founder of Guanyuan Consulting, credit rating agencies, as one of the important service institutions in the bond market, play an important role in conducting business fairly, justly and objectively, and disclosing information in a sound and timely manner, which plays an important role for the entire market, industry and investors.
In recent years, due to the increase in credit risk thunderstorms, the originally 'harmonious' rating market has also exposed some problems, such as inflated ratings, rating bubbles, and failure to effectively reveal credit risks. Zhou Yiqin told the "China Times" reporter, "These penalized institutions are the most important rating agencies in China, and the central bank adheres to the principle of strict supervision, and has issued a number of large fines for the independence, consistency and information disclosure of rating companies." ”
Regarding the current rectification plan of the rating agencies with more fines, the reporter called some of the above-mentioned companies, but did not receive any reply as of press time.
Regulatory trends are set to become more stringent
According to Article 2 of the Interim Measures for the Administration of the Credit Rating Industry, credit rating refers to the analysis of credit risk factors affecting economic entities or debt financing instruments by credit rating agencies, and the comprehensive evaluation of their ability and willingness to repay debts, which is expressed through pre-defined credit rating symbols.
Credit rating business refers to activities such as information collection, analysis, evaluation, review, and release of results for the purpose of carrying out credit ratings. "Credit rating agencies" refers to social intermediary institutions established in accordance with law and mainly engaged in credit rating business.
According to the latest "Filing Legal Person Credit Rating Agency" released by the People's Bank of China, as of July 14, 2023, a total of 52 credit rating agencies across the country have been filed with the central bank.
In accordance with the foregoing provisions, if a credit rating agency intentionally or grossly negligently causes serious damage to the interests of investors, rating clients or rating targets, the competent department in charge of the credit rating industry, the business management department or its dispatched agency shall give a warning and impose a fine of not less than 1 time but not more than 3 times the income from the relevant rating business, and if there is no income from rating business or the income from rating business cannot be calculated, a fine of between 2 million and 5 million yuan shall be imposed; The person directly responsible shall be given a warning and fined between 30,000 and 100,000 yuan.
Talking about the large fines issued to the rating agencies, Bai Wenxi said that if the rating agencies violate the relevant principles or regulations, it will have a negative impact on the credibility and accuracy of their assessment results, thereby harming the interests of investors and market order. Therefore, in order to maintain market order and protect the interests of investors, the central bank has imposed penalties on these non-compliant rating agencies.
Extra-large fines can prompt rating agencies to pay more attention to internal controls and risk management, and improve the quality and accuracy of their assessments. This helps to promote the healthy development of the entire industry and provide better services to investors and the market. Bai Wenxi added.
The above-mentioned industry insiders also told reporters that both the strength of the fine and the number of penalties are the largest and largest so far, which also shows that for the long-term healthy development of the capital market, the regulatory authorities will be more stringent in the supervision of rating companies.
Editor-in-charge: Meng Junlian Editor-in-chief: Zhang Zhiwei.