International Law

Senator Nick Sherry, Minister for Superannuation and Corporate Law, has announced significant reforms to the regulation of credit rating agencies (CRAs) and research houses, following the publication of joint Treasury - ASIC report of a review conducted at the request of the Government by Treasury and the Australian Securities and Investment Commission (ASIC).

ASIC will be removing the current exemption held by CRAs that means they don't need to hold an Australian Financial Services Licence (AFSL). All research houses will be required to have an AFSL.

In addition to being required to hold an AFSL, CRAs will now also be required to issue an Annual Compliance Report outlining in detail to ASIC how they have complied with the recently updated International Organisation of Securities Commissions (IOSCO) Code of Conduct Fundamentals for CRAs.

ASIC will also require research houses to issue a similar annual compliance report which will cover management of conflicts of interest and the procedures, methodologies and assumptions that result in research house advice.