ASIC review leads to a re-think on ratings disclosure

ASIC Information Sheet 99

ASIC Information Sheet 99 (I.S 99) was released on 8 February 2010. I.S 99 explains how the type of Australian Financial Services Licence (AFSL) authorisation a CRA holds may now determine when ratings may be disclosed.

I.S 99 follows from Consultation Paper 117 ASIC released in September 2009, which called for submissions to consider whether or not to withdraw class order relief allowing issuers to cite credit ratings in a disclosure document or Product Disclosure Statement (PDS) without the consent of the CRA.

In accordance with s716(2) and 1013K of the Corporations Act, an issuer can only cite a rating in a retail prospectus or PDS if the CRA has provided consent to its use. I.S 99 explains that the form and context of a citation must be specifically consented to by the CRA and that all previous broader relief is withdrawn.