AUSTRALIAN retail investors have been locked out of obtaining credit ratings from the world's three big rating agencies.
All have new licences to rate products for Australian wholesale clients but have baulked at entering the retail market.
Although Standard & Poor's, Moody's Investor Services and Fitch Ratings have wholesale credit-rating licences effective on January 1 when new regulations came into force, they do not have licences for their ratings to be used by retail investors, Australian Securities and Investments Commission records confirm.
All three agencies have now blocked Australian retail investors from entering parts of their websites, a measure Moody's website explained was to comply with ''regulatory considerations'' in Australia. S&P, which has blamed its decision on the new regulations, now requires website users to verify they are wholesale clients to see ratings information.
S&P announced its surprise decision not to apply for a retail licence in November, saying its ratings were ''no longer available'' to retail investors.
Starting this year, credit ratings agencies operating in Australia must have financial services licences, a reform that followed criticism of the agencies' role in the financial crisis.
S&P blamed its decision not to apply for a retail licence on a requirement that it join an external dispute resolution tribunal, saying such a move could ''undermine the global consistency'' of its ratings and ''ultimately create investor confusion and harm financial markets''.
Moody's this week said the wholesale market was the focus of its business. Fitch did not give a reason for not seeking a retail licence.
Uncertainty surrounds how the new regime will work, including whether banks and other companies can cite credit ratings in promotional material or in product disclosure statements. It is unclear how the situation will affect the hybrid share market, a source of funding for banks and other companies.
ASIC is working on a guide that will clarify the situation.
The Australian Bankers Association said it was continuing to discuss the matter with ASIC. It warned late last year that the consequences of the withdrawal of credit ratings agencies would be ''very concerning'', saying raisings aimed at retail investors were an important source of capital for Australia's banks, and that retail investors expected offer documents to include credit ratings.
■ BusinessDay reported last month that Chris Dalton, the former head of S&P in Australia, was considering launching a retail credit ratings service. The article referred to Mr Dalton as a former chief executive of S&P in Australia. He was, in fact, general manager.
