Ratings agencies such as Moody's and Standard & Poor's have been monitoring Central Asian markets. Photo: iStock

The People’s Bank of China (PBOC) has published rules allowing foreign rating agencies to assess the credit risks of the country’s bonds, a move that could promote deeper risk assessment and pricing in the nation’s huge corporate debt market.

Under the previous framework, global ratings agencies could only have minority stakes in joint-venture operations in the country and could not issue ratings on local bonds.

Foreign credit rating agencies must now be registered under the PBOC, have a certain level of experience, have sound corporate governance and be generally accepted by qualified institutional investors, according to the notice, which was published on the central bank’s website on Monday evening.

To qualify, the foreign credit ratings agency must not have been involved in any major illegal acts in the past three years and not be subject to any investigations for illegal activity, the notice added.

“We are strongly committed to playing a part in the development of China’s domestic bond market,” Standard & Poor’s said in an emailed statement.

“We are reviewing the newly-released rules relating to the interbank bond market and will engage with regulators and other relevant stakeholders to determine how we can best serve the market.”

Fitch Ratings declined to comment, while Moody’s Investors Service was not immediately available for comment.

In December last year, the Ministry of Commerce and the National Development and Reform Commission – the government’s top planning agency — jointly published draft foreign investment guidelines aimed at removing restrictions on credit investigation and ratings services.