Johannesburg - The government gave notice at the weekend
that the Treasury would be tabling legislation to govern credit rating agencies
in South Africa, according to the Business Report on Monday.
Finance Minister Pravin Gordhan would pilot the legislation
through Parliament but the cabinet has already given its nod to the Credit
Rating Services Bill.
Economists.co.za director Mike Schussler said that if the
legislation was intended to make credit agencies like Moody's Investors Service
or Fitch fearful of issuing negative ratings "it would be very
disadvantageous".
Treasury deputy director-general Ismail Momoniat said the
legislation followed similar legislation in the European Union regulating
rating agencies, which had previously been unregulated.
He cited the example of agencies that had given triple-A
ratings to financial institutions, failing to warn clients of the dangers of US
subprime mortgages in 2007 and 2008.
However, Momoniat said it was not the Treasury's intention
to regulate "how they rate government agencies or the private
sector".
The intention behind the legislation - which would be made available this week - would be to ensure that systems "are fair" and the agencies did their work transparently.