The Australian Securities and Investments Commission (ASIC) has set a new standard in the use of credit ratings, with agencies now required to sign off on the use of the ratings by product manufacturers.
The regulator announced it would withdraw the existing class order relief that allows issuers of investment products to cite credit ratings without the consent of credit rating agencies. ASIC will withdraw the exemption from January 1, 2010, in a move that would “make credit rating agencies accountable for ratings cited” in disclosure documents.
The changes to the rulings mean from next year rating agencies must give consent for the rating to be published, including the form the rating is published in and its context.
As part of the new rules, agencies that give credit ratings for investment products offered to retail investors must also have adequate dispute resolution systems in place.
