Canada aligns credit rating rules with EU
Monday 30 January 2012 - by Karina Whalley
Any credit rating agency in Canada will now have to apply to become a "designated rating organisation" and adhere to rules on conflicts of interest, governance, conduct, a compliance function and required filings.
Canada, along with Argentina, Hong Kong, Singapore and the US are in an advanced state of assessment by the pan-European authority. Esma wants to conclude whether these countries' standards are up to scratch during the first quarter of this year.
The CSA published proposed amendments to the rule in March 2011, which included feedback received from Esma on whether the planned Canadian regulatory framework was "equivalent" to that of the EU. Since then, minor changes have been made.
"The CSA recognise the significant role credit rating organisations play in today's global credit markets," said Bill Rice, chair of the CSA.
"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," he added.
Once all regions have approved the proposal, the rule will come into effect on 20 April this year.
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