International Law

Senator Nick Sherry, Minister for Superannuation and Corporate Law, has released a report on ratings user reforms, compiled by Treasury and the Australian Securities and Investments Commission (ASIC),

The report contains four recommendations, all of which are accepted by the Government.

The recommendations are:
(i) for ASIC to consider possible options for investor education addressing over-reliance on credit ratings; (ii) for ASIC to continue to work with rating agencies on progressing their AFSL applications;
(iii) for banks and industry bodies to continue their efforts to encourage more informed investment decisions, and
(iv) for the Government to continue to make known the benefits and quality of Australia's prudential regulation system.

Previously the Government announced that ratings agencies would be required to hold an Australian Financial Services Licence (AFSL) by 1 July, 2009, and issue annual compliance reports against the International Organisation of Securities Commissions (IOSCO) Code of Conduct. IOSCO.

All three ratings agencies have now lodged licence applications with ASIC.

ASIC has requested, and the Government has agreed to, a short extension of the licensing timeframe to no later than 1 January, 2010.

The current AFSL exemption for ratings agencies will continue to apply until the new licensing commencement date.