[author: Tiffany Canzano]
On July 26, 2012, the Canadian Securities Administrators (the “CSA”) released a request for comment on proposed consequential amendments to a number of national instruments, policies and forms related to National Instrument 25-101, Designated Rating Organizations (“NI 25-101″).
As discussed in a previous post, NI 25-101 requires credit rating agencies or organizations to apply to become a “designated rating organization” (“DRO”) if they wish to have their credit ratings eligible for use in securities legislation. DROs are also required to comply with a set of rules concerning conflicts of interest, governance, conduct, compliance and required filings.
The proposed amendments, among other things, will replace the terms “approved rating” and “approved credit rating” in a number of instruments, policies and forms with “designated rating” and will include a rating provided by a DRO affiliate (as defined in NI 25-101). Further, the references to “approved rating organization” and “approved credit rating organization” will be replaced with the term “designated rating organization”.
The CSA is also requesting comments on a consequential amendment to Item 7.9 of Form 44-101F1, Short Form Prospectus which will clarify that the disclosure of an issuer’s relationship with a credit rating agency or organization is limited to the securities being distributed under a short form prospectus.
Comments are being accepted until October 24, 2012