SECP Upholds Penalty on VIS Credit Rating Company for Regulatory Violations

ISLAMABAD: The Appellate Bench of the Securities and Exchange Commission of Pakistan (SECP) has dismissed the appeal filed by VIS Credit Rating Company Limited (formerly JCR-VIS Rating Company Limited), upholding a penalty of PKR 800,000 for multiple violations of the Credit Rating Companies Regulations, 2016.

The appeal was filed against the SECP’s order dated October 16, 2019, issued by the Commissioner of the Securities Market Division (SMD) under Section 159 of the Securities Act, 2015. The order found VIS Credit Rating Company non-compliant with several regulatory provisions, including conflicts of interest in rating assignments, failure to conduct internal audits, inadequate risk management policies, absence of indicative ratings, and lapses in maintaining proper regulatory documentation.

After considering the arguments presented by both sides, the Appellate Bench reaffirmed the SECP’s decision, emphasizing the need for strict compliance with the regulatory framework to uphold transparency and integrity in the credit rating industry. The bench highlighted that credit rating agencies must adhere to the highest standards of fairness, efficiency, transparency, and ethics in their operations.

The SECP reiterated its commitment to enforcing compliance with relevant laws to ensure a fair and efficient financial market. As key components of the financial ecosystem, credit rating agencies play a crucial role in enhancing market transparency, investor confidence, and financial stability. Therefore, they are obligated to exercise due diligence in fulfilling regulatory requirements.