Guide for disclosure of credit ratings

Guide for disclosure of credit ratings by non-bank deposit takers

The Securities Commission today issued interim guidance for non-bank deposit takers (NBDTs) on disclosure of credit ratings. Mandatory credit rating requirements for NBDTs come into effect on 1 March.

The Commission has provided this guidance pending the introduction of new credit rating disclosure regulations being prepared by the Ministry of Economic Development. The guidance note sets out the Commission’s enforcement approach to disclosure of credit ratings for the period until regulations come into force.

“Credit ratings are important to help investors to assess the risks of an investment. Deposit takers must ensure that they give investors clear information about their credit ratings and what those ratings mean, and that references to credit ratings are not likely to mislead or confuse”, Commission Chairman Jane Diplock says

The Securities Commission has information for investors about credit ratings and what they mean on its website, www.looklearninvest.org.nz.

The new credit rating requirements for non-bank deposit takers under the Reserve Bank of New Zealand Act 1989 come into force on 1 March 2010. From that date all deposit takers must have a credit rating, or be exempted from this requirement by the Reserve Bank.

Under changes to the Reserve Bank Act made in 2008, the Reserve Bank became the prudential regulator of NBDTs. The Securities Commission has responsibility for the enforcement of deposit takers’ disclosure requirements under the Securities Act 1978.

ENDS

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