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New rules to be adopted for credit rating agencies

Published by Steve Coleman on January 27, 2012

Credit rating agencies looking to do business in Canada will have a new set of requirements to live by as early as April.

Canadian Securities Administrators announced Jan. 27 that, as the organization responsible for the oversight of credit rating organizations, it plans to adopt rules consistent with European regulations.

"The CSA recognize the significant role credit rating organizations play in today's global credit markets," said Bill Rice, Chair of the CSA, and Chair and Chief Executive Officer of the Alberta Securities Commission in a news release. "By considering international developments while creating the Canadian regulatory regime for credit rating agencies, the CSA has set appropriate standards for credit rating agencies that are also consistent with international regimes."

The new standard will mean the adoption of NI 25-101 Designated Rating Organizations, which imposes requirements on credit rating organizations wishing to have their credit ratings eligible for use in securities legislation.

Credit rating organizations will have apply to become a "designated rating organization" and adhere to rules concerning conflicts of interest, governance, conduct, a compliance function and required filings.

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