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SEO Announcement on Unauthorized CRAs

The Securities and Exchange Organization of Iran (SEO) banned the activity of any individual or entity having no license on credit rating.

 

 The Securities and Exchange Organization of Iran (SEO) banned the activity of any individual or entity having no license on credit rating.

Based on Note 21, Article 1 of the Securities Market Act (SMA) of the Islamic Republic of Iran, “credit rating agencies are considered financial institutions”, while as per Note 28 of the same SMA, establishment and operation of “Exchanges, OTCs and financial institutions” are under the SEO supervision.

Any breaching of this law is subject to Note 1, Article 49 of the SMA. Article 49 depicts:

The following persons shall be sentenced to prison from one to six months or a cash penalty equal to one to three times the earned profit or the non-incurred loss, or both:

1.         Any person who involves in activities of brokers, broker/dealers or market makers that require permission, without observing the provisions of the present Act under any title whatsoever and/or introduces himself under one of the said titles;

2.         Any person who is obliged to present total or partial information or documents to the Organization and/or the related Exchange based on the present Act and refrains to do so;

3.         Any person who is responsible for execution of documents, information, Registration Statements, Prospectus and the like for filing with the Organization and also any person who is responsible for considering and commenting on or execution of financial, technical or economic reports or any certification of such documents or information and violates the provisions of the present Act in the execution of the entrusted tasks and duties;

4.         Any person intentionally and consciously misusing any information or documents or false and incorrect reports related to securities, in whatsoever manner.