Singapore MAS Released Code of Conduct for Providers of ESG Rating & Data Products Alongside Checklist, Established Baseline Industry Standards for Transparency in Methodologies & Data Sources, Governance & Management of Conflicts of Interest, Providers Encouraged to Disclose Adoption of Code of Conduct & to Release Completed Checklist Within 12 Months
7th December 2023 | Hong Kong
The Monetary Authority of Singapore (MAS) has released a Code of Conduct for providers of ESG rating & data products alongside a Checklist (ESG ~ Environmental, Social & Governance), with the Code of Conduct establishing a baseline industry standards for transparency in methodologies & data sources, governance & management of conflicts of interest. Singapore MAS encourages providers to disclose adoption of the Code of Conduct and to release the completed Checklist within 12 months of publication. Singapore MAS: “The Monetary Authority of Singapore (MAS) today published its finalised Code of Conduct for ESG Rating and Data Product Providers (“CoC”) and an accompanying Checklist for providers to self-attest their compliance to the CoC (“Checklist”), following a public consultation conducted from June to August 2023. The CoC 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. It builds upon the International Organisation of Securities Commissions’ (“IOSCO”) recommendations for good practices for such providers. Respondents to the consultation have expressed strong support for the CoC. Users also agree that providers’ self-attestation on the Checklist should, where feasible, undergo third party assurance or audit. MAS encourages providers to disclose their adoption of the CoC and publish their completed Checklist within 12 months from publication of the CoC. To enable users to easily identify providers which have publicly adopted the CoC, MAS has worked with.” See full statement below:
“ Singapore MAS Released Code of Conduct for Providers of ESG Rating & Data Products Alongside Checklist, Established Baseline Industry Standards for Transparency in Methodologies & Data Sources, Governance & Management of Conflicts of Interest, Providers Encouraged to Disclose Adoption of Code of Conduct & to Release Completed Checklist Within 12 Months “
Lim Tuang Lee, Assistant Managing Director (Capital Markets), MAS: “The Code of Conduct will help build market confidence in the use of ESG rating and data products. 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. 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.”
Singapore MAS Released Code of Conduct for Providers of ESG Rating & Data Products Alongside Checklist
6th December 2023 – The Monetary Authority of Singapore (MAS) today published its finalised Code of Conduct for ESG Rating and Data Product Providers (“CoC”) and an accompanying Checklist for providers to self-attest their compliance to the CoC (“Checklist”), following a public consultation conducted from June to August 2023.
- The CoC 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. It builds upon the International Organisation of Securities Commissions’ (“IOSCO”) recommendations for good practices for such providers. Respondents to the consultation have expressed strong support for the CoC. Users also agree that providers’ self-attestation on the Checklist should, where feasible, undergo third party assurance or audit.
- MAS encourages providers to disclose their adoption of the CoC and publish their completed Checklist within 12 months from publication of the CoC. To enable users to easily identify providers which have publicly adopted the CoC, MAS has worked with the International Capital Market Association [1] (“ICMA”) to host a list of such Providers on ICMA’s website.
MAS 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.
Notes
[1] The International Capital Market Association (“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. It promotes well-functioning cross-border capital markets, with a diverse membership base including private and public sector issuers, banks, investors, market infrastructure providers, to name a few. ICMA provides industry-driven standards and recommendations, prioritising three core fixed income market areas: primary, secondary and repo and collateral, with cross-cutting themes of sustainable finance and FinTech and digitalisation. ICMA works with regulatory and governmental authorities to support financial regulation with the objective of promoting stable and efficient capital markets.
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