DBRS Supports Legislation to Regulate Credit Rating Organizations in Ontario as Part of a National Regulatory Framework

DBRS notes that Ontario Budget Bill 135, the Helping Ontario Families and Managing Responsibly Act, 2010 (Bill 135), will modify and introduce new budget and financial measures. Among other areas, Bill 135 will provide the Ontario Securities Commission (OSC) the authority to regulate credit rating organizations (CROs). The OSC, in conjunction with the Canadian Securities Administrators (CSA), has proposed a National Instrument* to formally regulate CROs (the CRO Regulatory Framework).

The National Instrument proposes to develop and implement a securities regulatory regime for CROs that wish to have their credit ratings eligible for use in places where credit ratings are referred to in Canadian securities legislation that is consistent with international standards and developments. The CSA has recognized that CROs have a significant impact on financial markets and play a critical role in the capital markets.

As the only Canadian-based credit rating agency, DBRS plays a unique and critical role in the Canadian capital markets by rating new and emerging Canadian companies. DBRS is supportive of CRO legislation and regulation in Ontario and across Canada. DBRS believes that a transparent regulatory framework serves to drive commitment to high standards, facilitates ongoing regulatory dialogue and supports investor and market education.

DBRS credit ratings, research and financial analysis help Canadian and international investors make informed financial decisions. It is important that the CRO Regulatory Framework support the IOSCO Code** principles and enable the use of DBRS ratings internationally.

DBRS is Canada’s leading credit rating agency, with headquarters in Toronto and offices in New York, Chicago and London.

• The National Instrument includes the following:
  – National Instrument 25-101 Designated Rating Organizations (the Proposed Instrument)
  – Companion Policy 25-101CP to National Instrument 25-101 Designated Rating Organizations (the Proposed Companion Policy)
  – Consequential amendments to National Instrument 41-101 General Prospectus Requirements
  – Consequential amendments to National Instrument 44-101 Short Form Prospectus Distributions
  – Consequential amendments to National Instrument 51-102 Continuous Disclosure Obligations
  – National Policy 11-205 Process for Designation as a Designated Rating Organization in Multiple Jurisdictions (the Proposed NP 11-205)

** International Organization of Securities Commissions (IOSCO) Code of Conduct Fundamentals for Credit Rating Agencies (IOSCO Code)