The Financial Sector Conduct Authority (FSCA) has approved the license application of Sovereign Africa Ratings (Pty) Ltd (SAR) to operate as a credit rating agency. The ratings agency has been approved to officially operate from the 8th of March 2022. Sovereign Africa Ratings (Pty) Ltd is based in Centurion, South Africa, and is authorized to issue sovereign ratings only.
In terms of Sovereign credit ratings the following criteria needs to apply:
(a) The entity rated is a state or a provincial or local authority of the state; or
(b) the issuer of the debt or financial obligation, debt security; or other financial instrument is a state, or a provincial or a local authority of the state; or
(c) a special purpose vehicle of a state or a provincial or a local authority of a state.
Licensed credit rating agencies are subject to on-going supervision and monitoring by the Authority just like registered financial service providers to ensure they continually meet the conditions for licensing. This move will provide a wider range of sovereign credit ratings to ensure that their is a balance amongst rating agencies.