Credit Rating Firms To Get Easier Entry
Beginning as early as May, it should be less difficult for foreign credit rating and research companies to enter the Korean market, as the government plans to revise the law on the subject.
A number of international bond raters, including Moody's Investors Service, have wanted to provide their services in the domestic market but could not because they did not conform to a law requiring that a majority of shares in a credit rating firm be owned by certain types of financial institutions.
The Ministry of Finance and Economy said Sunday that it planned to expand the definition of "financial institutions" for purposes of that law. The ministry said it would include local credit rating agencies and the corresponding institutions of foreign countries in the definition.
"We plan to revise the law to introduce the more developed credit rating skills of foreign risk analysis agencies to the local market," a ministry official said. "It will improve the quality of credit research done in the domestic market."
The official added that it would take about two months for the revision to go into effect, because it first needs to win the approval of both the Ministry of Legislation and the cabinet council.
About 30 domestic companies currently provide credit rating and research services in the local market.
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