The finalised Code of Conduct for ESG Rating and Data Product Providers (“Code“) and an accompanying Checklist for providers to self-attest their compliance to the Code (“Checklist“) were published by the Monetary Authority of Singapore (“MAS“) on 6 December 2023. The voluntary Code aims to set out 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.
This Update gives you a snapshot of what to expect under this Code, along with our comments. This development follows an earlier public consultation conducted by MAS from June to August 2023, which we have earlier covered in our July 2023 Client Update on “MAS Consults on Code of Conduct of ESG Rating and Data Product Providers“. MAS has also issued its Response to feedback received on the consultation paper, available at this link on the MAS website.
The Code is applicable to ESG rating and data product providers (collectively, “providers“) on a “Comply or Explain” basis. Providers must comply with the principles and best practices set out in the Code, or explain why they do not comply with the Code (or specific principles/best practices).
- “ESG rating provider” refers to any entity offering any ESG rating in Singapore or providing any ESG rating out of Singapore, that relates to activities and institutions in the securities and derivatives industry; but does not include an entity solely compiling or redistributing ESG ratings produced, whether by related or unrelated parties.
- “ESG data product provider” refers to any entity providing any ESG data product in Singapore to participants in the financial market or providing any ESG data product out of Singapore, as part of its business continuously and repeatedly, in relation to activities and institutions in the securities and derivatives industry. Exclusions are detailed in the Code.
For more information, click here to read the full Legal Update.
