The Securities Authority has launched a system for analyzing the rating data provided to companies that have issued debentures to the public. The Authority explains that the system was launched in light of the Authority’s importance in making information accessible to investors, as a tool for investment decisions. The system centralizes and accesses the information easily and simply in one place.
The Authority’s announcement comes after the stock exchange management also clarified that in their opinion the credit rating companies do not supply the goods, as we have written many times on the BizPortal website in the past. In a document published by the TASE, which includes lessons learned from the Corona crisis, the TASE management proposed adding a new pretext for withdrawing bonds from the Tel-Bond indices – if the market has spoken and yields have risen, the bonds will be removed from the indices – “Reaction companies’ response time is too slow “, Explained the stock exchange, which actually seeks to prevent harm to investors in mutual funds.
The Securities Authority is now launching the system, which includes information from the reports of the rating companies, which were reported and published by them publicly in the Magna system as of November 1, 2019. The system centralizes the main data from the rating reports, which mainly include the name of the rated company, the name of the rating company, the determined rating, the rating date, a brief description of the rating operation (this description refers to the rating action – rating increase, downgrade or discontinuation), reference to the rating report And more.
The system also allows information to be searched according to the following parameters: rating company, rating scale, the nature of the message, and the rating date (see examples below). In the future, search options will be expanded to include additional parameters. The database is updated immediately when a rating report is published by the rating companies.
Link to the Securities Authority’s rating data system
(To enter the system, click on the image)
The system has been established, in accordance with leading policies Chairman of the Authority, Anat Guetta, For making information accessible to investors, as part of the toolbox for making investment decisions. Accordingly, the chairman of the authority last week held a round table on the desired standard in the field of rating in the debt market in Israel. The discussion took place in light of the need to refine and refine the existing tools among investors and especially public investors who purchase bonds. Guetta opened the discussion. The Authority for the Protection of Investors’ Interest in the Capital Market requires that the market mechanisms be further strengthened to ensure the correctness of pricing processes over time. The Authority is launching a database that will be open to the public and will present the rating data provided to the issuing companies by the rating companies. ”
Guetta added: “In 2020, the volume of the corporate market stands at NIS 350 billion. At the same time, with the development of the market, there has been a significant increase and the rate of companies raising debt has doubled in the last decade. Today, most negotiable debt is graded debt. 16% of the companies are rated twice, and these constitute 40% of the volume of tradable debt. The rest of the companies are rated with a single external rating or not rated at all. This is different in relation to Western markets. For the same debt In practice, sophisticated players with enormous unlimited resources are active in our corporate market, in addition to which the market is open to investors from the public, who are not considered experts and therefore rely mainly on the type of information published by the rating companies. “One billion shekels – this is the intended volume of purchases. The involvement will and will in the future affect the pricing mechanisms, and the market, and that makes our discussion relevant.”
The discussion was attended by: Chairman of the Securities Authority – Ms. Anat Guetta, Commissioner of the Capital Market Insurance and Savings Authority – Dr. Moshe Barkat, Prof. Anat Admati and Prof. Darrell Duffy of Stanford University, Prof. Ephraim Benmelech of Northwestern University, U. Midroog Ltd. – Mr. Barak Sorni, CEO of City Israel – Mr. Neil Korney, Lobby 99 – Adv. Linor Deutsch and Mr. Moshe Kashi, CEO and owner Yellin Lapidot – Mr. Yair Lapidot, Prof. Avi Ben Best of the University Hebrew, Jerusalem and Prof. Dan Amiram of Tel Aviv University.
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