Earlier today, the Canadian Securities Administrators announced the adoption of a new national instrument, related policies and consequential amendments to impose regulatory oversight for designated credit rating agencies and organizations. The new NI 25-101, first proposed in draft form in July 2010 and amended in March 2011 requires designated rating organizations to establish, maintain and comply with a code of conduct substantially based on the IOSCO Code of Conduct Fundamentals for Credit Rating Agencies unless exemptive relief is obtained. The instrument also sets out requirements with respect to compliance, filing, and the maintenance of books and records.
Meanwhile, all jurisdictions except Ontario are adopting amendments to Multilateral Instrument 11-102 Passport System to permit the passport system to be used for applications for designations by credit rating organizations and exemptive relief applications by designated rating organizations. NP 11-205, which was also published and to which Ontario is a party, is the equivalent policy that sets out how the process would work for filing and the review of an application to become a designated rating organization in Ontario and the passport jurisdictions.
While the draft instrument was amended in response to comments received during the consultation process, the changes are not considered material. As such, assuming Ministerial approvals are received, the new instrument and related policies and consequential amendments will come into force on April 20, 2012.
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