CSA adopt changes to terms regarding designated rating organizations

The Canadian Securities Administrators today announced the adoption of amendments to a number of national instruments and policies, including those respecting registration requirements, prospectus distributions and disclosure obligations, that would replace current references to "approved rating organization" and "approved credit rating organization" with "designated rating organization". Meanwhile, the terms "approved rating" and "approved credit rating" are being replaced with "designated rating".

The changes, initially proposed in July 2012, are intended to fully implement the new regulatory regime surrounding designated rating organizations pursuant to National Instrument 25-101 Designated Rating Organizations. In light of concerns from commenters (including members of our firm) that the amendments would create unintended adverse consequences for existing agreements that refer to "approved" credit ratings or "approved" credit rating organizations, the CSA has added language to the relevant instruments stating that it is reasonable to interpret the predecessor terms as having the same meaning as their respective successor terms.

The amendments come into force on May 31, 2013.

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