The Securities Association of China ("SAC") has recently issued the Circular on Matters Concerning the Business Activities of Credit Rating Agencies in the Securities Market during the Period of Epidemic Prevention and Control (the "Circular").
According to the Circular, amid the ongoing epidemic, rating agencies may, on the premise that the compliance of business activities is ensured, conduct relevant work by video, phone or other means, on due diligence that should have been performed on the spot, and take detailed records of the interview and safekeep the recording of the entire interview process; and may perform on-site due diligence and require the submission of relevant materials as the case may be, after the epidemic comes to an end. Meanwhile, the Circular states that as regards corporate bonds or asset-backed securities issued on the trading floor of such exchanges as Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE), from which funds will be raised primarily for epidemic prevention and control, the underlying assets of which involve the epidemic prevention and control purposes, or which are offered by enterprises in seriously-hit regions or greatly affected by the epidemic, rating agencies may, without prejudice to the quality of their rating services, properly schedule the rating operations, and exempt enterprises in seriously-hit regions from or allow them to pay later the rating service fees, as the case may be, in order to help relieve the liquidity difficulties during the period of epidemic prevention and control.