China has allowed S&P Global Inc. to enter its credit rating market, the central bank announced Monday, as part of the country's latest efforts to open up its financial sector.
The Operations Office of the People's Bank of China (PBOC) has registered the U.S. firm's Beijing-based wholly-owned subsidiary, while the National Association of Financial Market Institutional Investors has accepted the registration of the subsidiary to conduct bond rating business in the inter-bank bond market, according to a PBOC statement.
Calling the opening up of the credit rating sector "an important part" of the move to steadily open up the financial market, the PBOC said it would support more internationally influential and qualified foreign credit rating agencies to enter the Chinese market.
"With accelerating internationalization of China's financial market, the introduction of international credit rating agencies will help meet the demand of global investors for diverse yuan asset allocation, improve the quality of credit ratings in China, and play a positive role in promoting the regulated and healthy development of the Chinese financial market," the statement said.
China introduced over 10 measures to further open up its financial sector last year, including easing ownership restrictions and enabling access to certain niche markets.
The PBOC on Monday pledged to enhance ratings regulation and strengthen the market discipline mechanism to bring the role of credit ratings in risk disclosure and pricing into full play.
Credit rating agencies should also play a role in improving the financing environment of private and small firms, helping the financial sector serve the real economy better and guiding market expectations, according to the statement.
