On July 26, the U.S. SEC adopted new rules intended to reduce the reliance on credit ratings for regulatory purposes by removing such ratings from the eligibility criteria for issuers seeking to register securities offerings using "short form" registration. Specifically, the new rules remove the condition that securities be rated investment grade by at least one credit rating agency that is a nationally recognized statistical rating organization and allow short form registration if the issuer satisfies one of four new conditions. The new rules also include a three-year grandfathering provision.
The amendments were initially proposed in February in light of section 939A of Dodd-Frank, which calls for the review of references to credit ratings in regulations issued by federal agencies. Generally, the amendments will be effective as of September 2, 2011, except for provisions rescinding Form F-9, used by some Canadian registrants to register non-convertible investment grade debt, which will come into force on December 31, 2012.