The Financial Sector Conduct Authority (FSCA) has granted Sovereign Africa Ratings (Pty) Ltd (SAR) a license to operate as a sovereign credit rating agency from March 8, 2022.
SAR is based in Centurion in Gauteng, and is authorized to issue sovereign ratings only.
According to the FSCA, a sovereign credit rating is one where:
- The entity rated is a state or a provincial or local authority of the state; or
- The issuer of the debt or financial obligation, debt security, or other financial instrument is a state, or a provincial or local authority of the state; or
- A special purpose vehicle of a state or a provincial or local authority of a state.
It says the approval is in terms of Section 5 of the Credit Rating Services Act which “seeks to ensure that credit ratings issued in South Africa meet minimum standards of quality, transparency and independence”.
Only companies licensed by the authority as credit rating agencies may legally issue credit ratings that may be used for regulatory purposes.
Palesa Mofokeng is a Moneyweb intern.