FSCA grants licence to Sovereign Africa Ratings

The Financial Sector Conduct Authority (FSCA) has granted Sovereign Africa Ratings (Pty) Ltd (SAR) a licence to operate as a sovereign credit ratings agency from March 8, 2022.

SAR is based in Centurion in Gauteng, and is authorised to issue sovereign ratings only.

According to the FSCA, a sovereign credit rating is one where:

The entity rated is a state or a provincial or local authority of the state; or

The issuer of the debt or financial obligation, debt security, or other financial instrument is a state, or a provincial or local authority of the state; or

A special purpose vehicle of a state or a provincial or local authority of a state.

It says the approval is in terms of Section 5 of the Credit Rating Services Act which “seeks to ensure that credit ratings issued in South Africa meet minimum standards of quality, transparency and independence”.

Only companies licensed by the authority as credit rating agencies may lawfully issue credit ratings that may be used for regulatory purposes.