DBRS Comments on CSA Proposal on Regulatory Framework for Credit Rating Agencies

DBRS has provided its comments on the Canadian Securities Administrators (CSA) proposal on National Instrument 25-101 (the Revised Proposed Instrument) toward ensuring a regulatory framework that is workable for credit rating agencies (CRAs) domiciled in and outside Canada. The Revised Proposed Instrument would impose requirements on CRAs that wish to have their credit ratings eligible for use in Canadian securities legislation.

The CSA published for comment the initial Proposed Instrument on July 16, 2010 (the 2010 Proposal). DBRS submitted a comment letter at that time. The Revised Proposed Instrument reflects significant changes from the 2010 Proposal.

As a global credit rating organization (CRO) whose ratings are used internationally, DBRS believes that regulations or, in the case of Canada, requirements for a code of conduct should be internationally harmonized to the extent possible. The Revised Proposed Instrument has importantly focused on measures to ensure the high quality, independence and transparency of ratings. However, in light of ongoing developments and challenges in the CRA industry, DBRS suggests that the CSA proposal needs to be calibrated to global precedents, notably in the areas of transparency and disclosure, analytical independence and objectivity of the ratings process.

The DBRS response to the Revised Proposal Instrument is available under Regulatory Affairs at www.dbrs.com.

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