In Japan, in order to ensure market fairness and transparency, under the Financial Instruments and Exchange Law, a new registration system for credit ratings agencies has been introduced. As a result of this, this website may feature information provided some credit ratings agencies that are not locally registered according to these regulations in Japan. Such ratings are referred to as "non-registered ratings" and include those belonging to:
For your reference, please find below information explaining about the new registration system and how to obtain further information about the summaries of its policies and criteria for each credit rating agency.
The Hongkong and Shanghai Banking Corporation Limited
From the viewpoint of ensuring fairness and transparency in the markets, the Financial Instruments and Exchange Law has introduced a registration system for credit rating agencies. In accordance with this regulation, financial instruments firms are required to inform customers of the fact that the rating is not registered and the rationale for the registration system, etc. whenever soliciting any financial products using the ratings which are given by non-registered credit rating agencies. This requirement is also applicable to solicitation of certain types of deposits such as foreign currency deposits using the ratings by non-registered credit rating agencies.
Rationale for the Registration System
Registered credit rating agencies are subject to regulations such as: (1) the duty of good faith; (2) the duty to maintain an operational management system which prevents conflicts of interest and ensures the fairness of the credit rating process, etc.; (3) the prohibition on giving a credit rating to a security which they hold; and (4) the duty to disclose information including to prepare and make available for public inspection the policies for credit ratings and the documents for public release and explanation. Registered credit rating agencies are also subject to supervision by the Financial Services Agency, including orders to submit information, onsite inspections and business improvement orders. However, non-registered credit rating agencies are not subject to such regulation or supervision.
Name of the Credit Rating Agency Group, etc.
Name of the Credit Rating Agency Group:
Moody's Investors Service, Inc. ("Moody's")
Name of the Registered Credit Rating Agency within the Group and its Registration Number:
Moody's Japan K.K. (FSA Commissioner (Rating) No. 2)
Method of Obtaining the Information about the Summaries of the Policies and Criteria for Credit Rating
The information is published in the "Matters Related to the Explanation of Non-Registered Ratings" (「無登録格付説明関連」) in the page of "Use of Credit Ratings Given by Non-registered Companies" (「無登録業者の格付の利用」) which is displayed after clicking "Credit Rating Business" on the website of Moody 's Japan K.K. (http://www.moodys.co.jp).
Assumptions, Significance and Limitations of the Rating
Credit ratings are Moody 's Investors Service, Inc.'s ("MIS") current opinions of the relative future credit risk of entities, credit commitments, or debt or debt-like securities. MIS defines credit risk as the risk that an entity may not meet its contractual, financial obligations as they come due and any estimated financial loss in the event of default. Credit ratings do not address any other risk, including but not limited to: liquidity risk, market value risk, or price volatility. Credit ratings do not constitute investment or financial advice, and credit ratings are not recommendations to purchase, sell, or hold particular securities. No warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any such rating or other opinion or information is given or made by MIS in any form or manner whatsoever.
Based on the information received from issuers or from public sources, the credit risks of the issuers or obligations are assessed. MIS adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MIS considers to be reliable. However, MIS is not an auditor and cannot in every instance independently verify or validate information received in the rating process.
This information is prepared as of Dec. 1, 2011 based on sources which we believe are reliable, but we do not guarantee its accuracy or completeness. For details, please refer to the above website of Moody 's Japan K.K.
EXPLANATORY NOTE ON NON-REGISTERED CREDIT RATING
(For Standard & Poor's Ratings Services)
From the viewpoint of ensuring fairness and transparency in the markets, the Financial Instruments and Exchange Law has introduced a registration system for credit rating agencies. In accordance with this regulation, financial instruments firms are required to inform customers of the fact that the rating is not registered and the rationale for the registration system, etc. whenever soliciting any financial products using the ratings which are given by non-registered credit rating agencies. This requirement is also applicable to solicitation of certain types of deposits such as foreign currency deposits using the ratings by non-registered credit rating agencies.
Rationale for the Registration System
Registered credit rating agencies are subject to regulations such as: (1) the duty of good faith; (2) the duty to maintain an operational management system which prevents conflicts of interest and ensures the fairness of the credit rating process, etc.; (3) the prohibition on giving a credit rating to a security which they hold; and (4) the duty to disclose information including to prepare and make available for public inspection the policies for credit ratings and the documents for public release and explanation. Registered credit rating agencies are also subject to supervision by the Financial Services Agency, including orders to submit information, onsite inspections and business improvement orders. However, non-registered credit rating agencies are not subject to such regulation or supervision.
Name of the Credit Rating Agency Group, etc.
Name of the Credit Rating Agency Group:
Standard & Poor's Ratings Services ("S&P")
Name of the Registered Credit Rating Agency within the Group and its Registration Number:
Standard & Poor's Ratings Japan K.K. (FSA Commissioner (Rating) No. 5)
Method of Obtaining the Information about the Summaries of the Policies and Criteria for Credit Rating
Assumptions, Significance and Limitations of the Rating
Credit ratings assigned by Standard & Poor's are statements of opinion on the future credit quality of specific issuers or issues as of the date they are expressed and do not guarantee timely payments of interest or principal. Credit ratings are not a recommendation to purchase, sell or hold any securities, or a statement of market liquidity or prices in the secondary market of any issues.
Credit ratings may change depending on various factors, including issuers' performance, changes in external environment, performance of underlying assets, creditworthiness of counterparties and others. Standard & Poor's conducts rating analysis based on information it believes to be reliable in terms of quality and quantity. However, Standard & Poor's does not perform an audit, due diligence or independent verification of any information it receives, or guarantees its accuracy, completeness or timeliness.
This information is prepared as of Dec. 1, 2011 based on sources which we believe are reliable, but we do not guarantee its accuracy or completeness. For details, please refer to the above mentioned website of Standard & Poor's Ratings Japan K.K.
EXPLANATORY NOTE ON NON-REGISTERED CREDIT RATING
(For Fitch Ratings)
From the viewpoint of ensuring fairness and transparency in the markets, the Financial Instruments and Exchange Law has introduced a registration system for credit rating agencies. In accordance with this regulation, financial instruments firms are required to inform customers of the fact that the rating is not registered and the rationale for the registration system, etc. whenever soliciting any financial products using the ratings which are given by non-registered credit rating agencies. This requirement is also applicable to solicitation of certain types of deposits such as foreign currency deposits using the ratings by non-registered credit rating agencies.
Rationale for the Registration System
Registered credit rating agencies are subject to regulations such as: (1) the duty of good faith; (2) the duty to maintain an operational management system which prevents conflicts of interest and ensures the fairness of the credit rating process, etc.; (3) the prohibition on giving a credit rating to a security which they hold; and (4) the duty to disclose information including to prepare and make available for public inspection the policies for credit ratings and the documents for public release and explanation. Registered credit rating agencies are also subject to supervision by the Financial Services Agency, including orders to submit information, onsite inspections and business improvement orders. However, non-registered credit rating agencies are not subject to such regulation or supervision.
Name of the Credit Rating Agency Group, etc.
Name of the Credit Rating Agency Group: Fitch Ratings ("Fitch")
Name of the Registered Credit Rating Agency within the Group and its Registration Number: Fitch Ratings Japan Limited (FSA Commissioner (Rating) No. 7)
Method of Obtaining the Information about the Summaries of the Policies and Criteria for Credit Rating
The information is published in the "Overview of Policies etc for Credit Rating"(「格付方針等の概要」) in the "Regulation Related" (「規制関連」) section on the website of Fitch Ratings Japan Limited (http://www.fitchratings.co.jp).
Assumptions, Significance and Limitations of the Rating
Ratings assigned by Fitch are opinions based on established criteria and methodologies. Ratings are not facts, and therefore cannot be described as being "accurate" or "inaccurate". Credit ratings do not directly address any risk other than credit risk. Credit ratings do not comment on the adequacy of market price or market liquidity for rated instruments. Ratings are relative measures of risk; as a result, the assignment of ratings in the same category to entities and obligations may not fully reflect small differences in the degrees of risk. Credit ratings, as opinions on relative ranking of vulnerability to default, do not imply or convey a specific statistical probability of default.
In issuing and maintaining its ratings, Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The assignment of a rating to any issuer or any security should not be viewed as a guarantee of the accuracy, completeness, or timeliness of the information relied on in connection with the rating or the results obtained from the use of such information. If any such information should turn out to contain misrepresentations or to be otherwise misleading, the rating associated with that information may not be appropriate. Despite any verification of current facts, ratings can be affected by future events or conditions that were not anticipated at the time a rating was issued or affirmed.
This information is prepared as of Dec. 1, 2011 based on sources which we believe are reliable, but we do not guarantee its accuracy or completeness. For details, please refer to the above mentioned website of Fitch Ratings Japan Limited.
