The Monetary Authority of Singapore (MAS) has published its finalised Code of Conduct for ESG rating and data product providers.
According to a Dec 6 statement by MAS, the code aims to establish baseline industry standards for transparency in methodologies and data sources, governance and management of conflicts of interest that may compromise the reliability and independence of the products.
The code builds upon the International Organisation of Securities Commissions’ (IOSCO) recommendations for good practices for such providers.
MAS first proposed the code in June. The launch of the code follows a public consultation conducted from June to August, which indicated “strong support” for the code, according to MAS.
MAS has also published an accompanying checklist for providers to declare their compliance to the code.
The central bank and regulator encourages providers to disclose their adoption of the code and publish their completed checklist within 12 months from today’s launch.
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Providers that adopt the code will be included in a list, to be hosted on the International Capital Market Association (ICMA) website.
MAS says it will continue to monitor developments in the industry and the global regulatory landscape when considering any further enhancements to the regulatory regime for such providers.
Lim Tuang Lee, assistant managing director (capital markets) at MAS, says the code will help build market confidence in the use of ESG rating and data products.
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“Its baseline transparency standards for rating methodologies and data sources will improve the comparability of ratings and data products. The code also encourages disclosures on how forward-looking elements are considered in such products, which will improve investors’ assessments of investee entities’ responses to transition risks and opportunities,” says Lee. “Overall, the code will support informed decision-making by investors keen on funding the climate transition. We welcome adoption by ESG rating and data product providers as soon as they are ready.”
The ICMA is a not-for-profit membership association with offices in Zurich, London, Paris, Brussels and Hong Kong, serving around 620 members in 66 jurisdictions globally.
The ICMA works with regulatory and governmental authorities to support financial regulation with the objective of promoting stable and efficient capital markets.
