Credit Ratings: The Moody's Case
Hong Kong Law Journal 47(1) 193-219, 2017
Posted: 18 May 2017 Last revised: 26 Jul 2017
Date Written: May 1, 2017
In Moody’s Investors Service Hong Kong Ltd v Securities and Futures Commission, the Securities and Futures Appeals Tribunal was required to determine whether a report issued by Moody’s fell within the scope of Hong Kong’s statutorily defined credit rating regime. The Tribunal determined that the report was either itself a credit rating or part and parcel of Moody’s credit rating services. This article analyses the Tribunal’s determination and concludes that it is flawed primarily as a result of concerns over its application of the purposive construction of statutory provisions and a failure to closely analyse the statutorily defined term “credit rating”. It is suggested that the determination gives rise to problematic consequences including blurring the regulatory perimeter of what constitutes a credit rating and providing credit rating services.
Keywords: credit rating regulation, Hong Kong, Moody's, SFAT, Securities and Futures Appeals Tribunal, SFC, Securities and Futures Commission
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