Credit Ratings: The Moody's Case

Posted: 18 May 2017 Last revised: 26 Jul 2017

See all articles by Syren Johnstone

Syren Johnstone

Department of Law, University of Hong Kong; Asian Institute of International Financial Law

Date Written: May 1, 2017

Abstract

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

Suggested Citation

Johnstone, Syren, Credit Ratings: The Moody's Case (May 1, 2017). Hong Kong Law Journal 47(1) 193-219, 2017; University of Hong Kong Faculty of Law Research Paper No. 2017/009. Available at SSRN: https://ssrn.com/abstract=2970470

Syren Johnstone (Contact Author)

Department of Law, University of Hong Kong ( email )

Faculty of Law, Pokfulam Road
Pokfulam
Hong Kong
Hong Kong

HOME PAGE: http://www.law.hku.hk/faculty/staff/syren_johnstone.php

Asian Institute of International Financial Law ( email )

Faculty of Law, Pokfulam Road
Pokfulam
Hong Kong
Hong Kong

HOME PAGE: http://www.law.hku.hk/faculty/staff/syren_johnstone.php

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