Scope of operation of credit rating agencies in Vietnam

Scope of operation of credit rating agencies in Vietnam (Image from the Internet)

1. Scope of operation of credit rating agencies in Vietnam

The Scope of operation of credit rating agencies as per Article 12 Decree 88/2014/ND-CP includes:

- Credit rating services as stipulated in Decree 88/2014/ND-CP.

- Services related to credit rating activities, including:

+ Information services on credit rating;

+ Training, fostering, and updating knowledge related to credit rating activities.

- When providing services related to credit rating activities regulated in Clause 2, Article 12 Decree 88/2014/ND-CP, Credit rating agencies must ensure no conflicts of interest as stipulated in Article 38 Decree 88/2014/ND-CP.

- Credit rating agencies are not allowed to operate in the following fields:

+ Accounting, auditing;

+ Securities including: Brokerage; advisory; underwriting; distribution agency; fund management; portfolio management; securities investment;

+ Banking.

2. Rights and Obligations of Credit rating agencies in Vietnam 

The rights and obligations of Credit rating agencies in Vietnam as per Article 13 Decree 88/2014/ND-CP are as follows:

- Credit rating agencies have the following rights:

+ To provide services stipulated in Article 12 Decree 88/2014/ND-CP;

+ To receive service fees from providing services stipulated in Article 12 Decree 88/2014/ND-CP;

+ To request the rated organizations to provide necessary documents and information related to the credit rating contract.

- Credit rating agencies have the following obligations:

+ To provide credit rating services only when granted a Certificate of Business Eligibility and disclose information as stipulated in Article 18 Decree 88/2014/ND-CP;

+ To organize the provision of credit rating services in compliance with the operational principles stipulated in Article 5 Decree 88/2014/ND-CP;

+ To adhere to the regulations in Decree 88/2014/ND-CP and other relevant legal regulations when providing credit rating services;

+ To ensure that the salary, remuneration, and bonuses for analysts and the Credit Rating Council members are not dependent on the service fees and the rating results of the credit rating contract in which the person participates;

+ To be responsible for maintaining all necessary conditions regarding capital, personnel, and operations as stipulated in Decree 88/2014/ND-CP and other relevant legal regulations;

+ To be liable before the law and the rated organization for the credit rating results under the signed credit rating contract.

3. Regulations on Types of Credit rating agencies in Vietnam

Regulations on types of Credit rating agencies in Vietnam according to Article 9 Decree 88/2014/ND-CP are as follows:

- The following types of enterprises are allowed to conduct credit rating services after being granted a Certificate of Business Eligibility according to Decree 88/2014/ND-CP:

+ Limited liability company;

+ Joint-stock company;

+ Partnership company.

- The naming of Credit rating agencies must comply with the legal regulations on enterprises.

- Enterprises that do not register for credit rating services are not allowed to use the term “credit rating” or other terms with similar meaning in their names.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE