Thursday, February 15,
2018 08.59AM / ASIC
ASIC has conducted a market-wide
surveillance of credit rating agencies (CRAs) and made a number of
recommendations for change.
The findings of the surveillance are
outlined in REP 566 Surveillance
of Credit Rating Agencies.
ASIC's main areas of focus were the
CRAs’ governance arrangements (including relating to conflicts of interest and
their corporate structure), transparency and disclosure.
ASIC's report makes a number of
observations about CRAs’ activities with some leading to recommendations for
change in areas such as board reporting, compliance teams and compliance
testing, analytical evaluation of ratings and human resources.
ASIC Commissioner Cathie Armour said,
'CRAs play an important role in our market by giving market users, for example,
investors, issuers and governments, a better understanding of credit risks and
informing their investment and financing decisions.
‘While many of the CRAs operate in a
global market with global standards, it is important that they do not lose
sight of their regulatory obligations in Australia', Ms Armour said.
ASIC is actively engaged internationally
on policy development for credit rating agencies through its membership of the
International Organization of Securities Commissions (IOSCO) and participates
in supervisory colleges for the three large international CRAs – Fitch, Moody’s
and S&P. Supervisory colleges were established to facilitate the exchange
of information between the supervisors of internationally active CRAs in order
to foster more effective supervision of these firms. Download REP 566
Under the Corporations Act, CRAs are
required to hold an Australian financial services (AFS) licence and to comply
with the conditions of the licence, including requirements to comply with the
IOSCO Code of Conduct Fundamentals for Credit Rating Agencies. CRAs are also
required to provide assistance to ASIC, including in relation to their
compliance with the Corporations Act.
There are currently six licensed CRAs
operating in Australia and they all formed part of the surveillance – A.M Best
Asia-Pacific Limited, Australia Ratings Pty Ltd, Equifax Australasia Credit
Ratings Pty Limited, Fitch Australia Pty Limited, Moody’s Investor Services Pty
Limited and S&P Global Ratings Australia Pty Ltd.
of Credit to the Corporate Sector Increases in Q4 2016 - CBN
Improvement in Credit Extension Ahead
Approach to Credit Extension
Moves to Open More Opportunities with Collateral Registry
Collateral Registry: 20,684 Movable Assets Valued at N392bn on the NCR
Growth in Private Sector Lending
of Credit Bureau Systems