Entire Section
Exclusions
GEN 2.27.2 GEN 2.27.2
A
Person does notOperate a Credit Rating Agency where thatPerson prepares any credit scores, credit scoring systems or similar assessments relating to obligations arising from consumer, commercial or industrial relationships.[Added] DFSA RM96/2012 (Made 24th July 2012) [VER30/07-12]GEN 2.27.2 Guidance
1. The effect of GEN Rule 2.27.1 is that even if aPerson undertakes from a place of business in the DIFC some but not all of theCredit Rating Activities for the purpose of producing aCredit Rating , thatPerson needs to have aLicence authorising it toOperate a Credit Rating Agency .2. Where aCredit Rating Agency outsources some of itsCredit Rating Activities , it will need to ensure that it meets the relevant requirements, including those relating to outsourcing, in GEN Rule 5.3.21.3. There is no express prohibition against carrying on theFinancial Service ofOperating a Credit Rating Agency byPersons who are authorised to carry on otherFinancial Services . However, the specific conduct requirements applicable toCredit Rating Agencies in COB chapter 8, include a prohibition against certain types of consultancy and advisory services being provided by aCredit Rating Agency . Therefore, even if aCredit Rating Agency has an appropriateLicence authorising it to provide advice on financial products, it will not be able to provide the prohibited type of consultancy and advisory services.4. APerson may provide a privateCredit Rating for the exclusive use of anotherPerson (Second Person) without seeking aLicense authorising it toOperate a Credit Rating Agency where theCredit Rating is produced based on the request of the Second Person and is not intended to be disseminated to the public or distributed by subscription. Such aPerson may wish to include an express warning in theCredit Rating that it is intended only for the exclusive use of the Second Person and obtain from such Second Person a prior written undertaking that theCredit Rating will not be disseminated to the public or distributed on subscription.5. Credit scoring referred to in GEN Rule 2.27.2 is a method of assessing creditworthiness. A credit score is primarily based on credit report information typically sourced from credit bureaus. APerson does not become aCredit Rating Agency merely by preparing or providing credit assessments. Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt. Insurance companies, and government departments also employ the same techniques.[Added] DFSA RM96/2012 (Made 24th July 2012) [VER30/07-12]