Duty of care canvassed for ratings houses
An industry round table examining the future licensing of ratings agencies has actively canvassed imposing a duty of care on the agencies with respect to retail investors.
The idea has been revealed by the Australian Securities and Investments Commission (ASIC) in its analysis of a number of industry round tables held to examine the possibilities for the new regulatory and licensing environment.
Referring to what amounted to imposing a duty of care, the ASIC analysis said such a move could improve their accountability for poor or ineffective ratings, arguably improving ratings.
It said, however, it had been noted that introducing a duty of credit rating agencies to investors might lead to credit rating agencies potentially leaving the market.
“In addition, any court action would be costly and lengthy if such legal action did eventuate,” the ASIC analysis said.
In its final recommendations, the regulator steered clear of the duty of care proposals saying it would consider possible options for investor education addressing over-reliance on credit ratings and continue to work with credit rating agencies in progressing their Australian Financial Service License applications.
Recommended for you
With the highest number of candidates in a year sitting the latest financial advice exam, a surge of new entrants are expected in the coming weeks, according to Wealth Data.
AMP has launched a range of five diversified index managed portfolios on its North investment platform, targeting a younger client demographic.
An NSW adviser, who advised over 120 clients after falsifying her financial advice exam results, has been permanently banned by ASIC.
ASIC has released the results from the latest financial adviser exam, the first to be run since changes to its structure earlier this year.