Credit Rating and Investors Services Philippines Inc. (“the Company” or “CRISP”) is committed to upholding the highest standards of ethical conduct, integrity, transparency, and impartiality in all aspects of its operations. This Code of Conduct and Conflict of Interest Policy (“the Policy”) serves as a comprehensive guide for directors, officers, analysts, employees, contractors, and all others acting on behalf of the Company (collectively referred to as “covered persons”) to safeguard the credibility of credit ratings, foster investor confidence, and uphold the Company’s reputation for independence and objectivity.
Core Values and Principles
- Integrity: All decisions and actions undertaken on behalf of CRISP must be characterized by honesty, fairness, and ethical behavior, free from improper influence or bias.
- Objectivity: Credit opinions shall be founded upon unbiased and independent analysis, utilizing all pertinent information and rigorous methodologies.
- Confidentiality: Sensitive information acquired through client engagements or internal processes must be protected and utilized exclusively for legitimate business purposes.
- Transparency: CRISP shall disclose its methodologies, rating assumptions, and any material conflicts of interest.
- Professionalism: Covered persons are expected to demonstrate competence, diligence, and respect for all stakeholders, including clients, regulators, investors, and the public.
Confidentiality of Information
- Non-public information obtained in the course of professional duties shall not be disclosed to unauthorized parties nor used for personal benefit.
- Covered persons must adhere to confidentiality agreements with clients and business partners.
- Material non-public information acquired through rating assignments or other channels is strictly prohibited from being used for trading or investment purposes.
- Breaching confidentiality can result in disciplinary measures, which may include termination of employment and/or suspension or termination of any engagement with the company.
- Such a violation typically involves the unauthorized disclosure of sensitive company or client information, whether intentional or unintentional.
- Illustrative examples of breaches include sharing confidential data with individuals outside your team, discussing proprietary matters on social media platforms, or failing to adequately secure documents containing personal information.
- The disciplinary process typically commences with a formal investigation and may proceed to written warnings, suspension, or ultimately dismissal, contingent upon the severity and consequences of the breach.
Conflict of Interest Policy
Definition of Conflict of Interest
A conflict of interest arises when a covered person’s personal, financial, or professional interests—or those of their immediate family—could interfere with, or appear to interfere with, the impartial fulfillment of their responsibilities to the Company.
For this Policy, “financial interest” is defined as any direct or indirect ownership, investment, or beneficial interest in an entity amounting to One Million Pesos (₱1,000,000) or higher, whether through shares, partnership, joint ventures, or other financial instruments.
Identification and Disclosure
- Covered persons are required to disclose, in writing, any actual, potential, or perceived conflicts of interest to the Compliance Officer or other designated authority at the earliest opportunity.
- An annual conflict of interest declaration is mandatory for all covered persons, encompassing interests that may conflict with official duties.
- Directors and officers must disclose any external directorships, significant shareholdings, or consultancy engagements that may present a conflict with the Company’s business interests. Significant shareholding or ownership is defined as a financial interest of Ten Million Pesos (₱10,000,000) or above.
Prohibited Activities
- No covered person shall participate in the assignment, rating, or review of any entity in which they, or their immediate family, have a financial interest of One Million Pesos (₱1,000,000) or above.
- Covered persons are strictly prohibited from soliciting or accepting gifts, favors, entertainment, or any item of material value from clients, issuers, or stakeholders that may influence, or give the appearance of influencing, the outcome of a rating or business decision.
- Engagement in any external business or employment activities that may conflict with the Company’s interests requires prior written approval from the Compliance Officer.
- Covered persons are prohibited from utilizing ratings to influence clients.
- Covered persons are prohibited from guaranteeing ratings.
- This provision explicitly states that individuals subject to these regulations are not authorized to provide any assurances to clients, issuers, or stakeholders regarding the attainment of specific rating outcomes under any circumstances. The objective is to uphold the integrity and impartiality of the ratings process, ensuring that assessments remain unbiased and uninfluenced by external commitments or pressures.
Procedures for Addressing Conflicts
- Upon disclosure of a conflict, the Compliance Officer will assess the situation and determine the appropriate course of action, which may include recusal from specific assignments, reassignment of tasks, or other remedial measures.
- All conflicts and their respective resolutions shall be duly documented and maintained in the Company’s records.
- Failure to disclose a conflict of interest may result in disciplinary action, including suspension or termination.
Organizational Safeguards
- CRISP enforces strict separation of roles between credit rating analysts and business development or sales teams to prevent undue influence.
- All rating decisions are subject to committee review and peer evaluation to ensure independence and consistency.
- Compensation, bonuses, or incentives for employees shall not be linked directly to specific rating outcomes or client fees.
- Periodic audits and compliance reviews are conducted to evaluate adherence to this Policy.
Handling of Gifts and Entertainment
- Covered persons may not accept, directly or indirectly, any gift or entertainment from individuals or entities conducting business with or seeking a rating from the Company, except for items of nominal value (e.g., company-branded items, modest refreshments at meetings).
- Any offer of gifts or entertainment exceeding nominal value must be promptly reported to the Compliance Officer.
Dealings with Clients and Third Parties
- Covered persons are prohibited from guaranteeing a specific rating or outcome to any client.
- Decisions regarding ratings and methodologies must remain independent of commercial or marketing considerations.
- All business interactions must be conducted transparently, equitably, and in accordance with all applicable laws and regulations.
Compliance, Monitoring, and Enforcement
- The Board of Directors of CRISP is responsible for overseeing the implementation and regular review of this Policy.
- Covered persons are required to participate in annual training on ethical standards, conflict of interest, and regulatory compliance.
- All actual or suspected violations of this Policy must be reported immediately to the Compliance Officer or via designated whistleblower channels.
- The Company strictly prohibits retaliation against individuals making good-faith reports of suspected policy violations.
- Any violation of this Policy will be subject to investigation and may result in disciplinary action, including but not limited to reprimand, suspension, termination, or legal proceedings, as warranted.
Whistleblower Protection
- The Company encourages employees and stakeholders to report unethical conduct, conflicts of interest, or breaches of policy without fear of reprisal.
- All reports will be investigated confidentially and addressed in a timely, impartial manner.
Training and Awareness
- Mandatory onboarding and annual refresher training on this Code and Policy shall be provided to all covered persons.
- Training materials will include relevant case studies and examples tailored to the Philippine regulatory environment and the credit rating industry.
The reputation of Credit Rating and Investors Services Philippines Inc. is founded upon the trust and confidence of the investing public and market participants. Strict adherence to this Code of Conduct and Conflict of Interest Policy ensures the integrity, objectivity, and transparency that are the cornerstones of CRISP’s operations.
Should uncertainties or questions regarding the application of this Policy arise, covered persons are strongly encouraged to seek guidance from the Compliance Officer or the Board of Directors.
This Policy supersedes all previous documents about conduct and conflict of interest at CRISP and shall take immediate effect upon its adoption.