Lanka Rating Agency not entitled in law to carry on business as a Credit Rating Agency nor review ratings: SEC

July 1, 2015 (LBO) – Sri Lanka’s Securities and Exchange Commission of Sri Lanka (SEC), at its meeting held on the 29th of June 2015, decided that due notice be given to members of the public that, registration of Lanka Rating Agency Limited (LRA) as a Market Intermediary under the category of ‘Credit Rating Agency’ lapsed on 30th June 2015.

Members of the public are accordingly informed that pursuant to the lapse of its registration, with effect from the 1st of July 2015, LRA is not entitled in law, to carry on business as a Credit Rating Agency nor review ratings.

“LRA is not entitled to carry on the business of assessing and evaluating or reviewing the credit-worthiness of any issue of listed securities or securities to be listed with regard to the issuers’ ability to perform any obligations imposed on the issuer thereon.” SEC said in a statement on Wednesday.

The SEC said that LRA has not as at date forwarded a duly completed and therefore valid application for renewal to the Securities and Exchange Commission of Sri Lanka in accordance with the regulatory requirements imposed by the Commission.

The SEC issues Certificates of Registration to Market Intermediaries with a validity period of one year.

In terms of the applicable law, preceding registration, the SEC is required to satisfy itself that a Market Intermediary has at no time been guilty of contravening any provisions of the SEC Act No 36 of 1987 (as amended) or any rules or regulations made there-under.

The SEC tooksteps to restrain Lanka Rating Agency Ltd from providing new ratings with effect from 25th March 2015 until the company complies with regulatory requirements imposed by the Commission.