Corporate Treasurers Issue Draft Code of Practice for Participants in the Credit Rating Industry

US, UK and French corporate treasury associations, with the support of the international grouping of national treasury associations today issued an exposure draft of a ratings industry code of practice.

The Associations represent most corporate issuers of rated debt and many users of ratings. A robust code of practice, globally followed, has the advantage of uniformity and flexibility, and helps avoid the possibility of fragmentation of global financial markets inherent in national and regional regulation.

The code covers the needs for:

Regulators, where the industry is regulated

• to avoid unnecessary barriers to entry for new rating agencies, but otherwise adopt a “light touch” in regulation

Ratings agencies

• to avoid any perception of conflicts of interest
• to enhance the transparency of the ratings process
• to safeguard non-public information provided to them by issuers
• to deal openly with issuers

Issuers

• to provide complete and accurate information to rating agencies in a timely
  manner

Association of Corporate Treasurers Chief Executive, Richard Raeburn, commented

 This draft code is a very important development. We hope that with the help of comments and participation from a wide range of interested parties it will form the basis of a major contribution to confidence in debt markets around the world. Issuers and investors have a keen interest in the standing of the credit rating industry. Members of treasury associations are heavily involved as rated issuers and as users of credit ratings, which, we believe, gives us a useful perspective from which to launch this initiative. Richard Raeburn, Chief Executive of the ACT

The Associations will welcome comments from industry participants, users of ratings and other interested parties both on the exposure draft and on the appropriate manner in which to incorporate a final Code into the credit rating process.

Notes to editors

For further information please visit the ACT Press Room.