Standard & Poor’s to pull out of Australian ratings market
28 August 2012
Standard & Poor’s will no longer have an Australian ratings and fund services presence from 1 October this year, according to a report from Australia-based news provider Money Management on Monday (August 27).
After the closure announcement, fund managers began withdrawing their funds for ratings, with ANZ/OnePath, Australian Unity,Perpetual, BT, Sandhurst Trustees, Premium China Fund, Macquarie Group and Challenger's Howard Mortgage funds all opting out of S&P’s services, until only three fund managers remained in June, said the report.
A number of senior departures, company restructures and unwieldy market conditions kept S&P busy in 2012 as it continued to weigh up the facts in its assessment of Australian funds.
Chief executive of van Eyk Research Mark Thomas was quoted as saying he expected the Australian ratings house market to shrink further. He said globally there were three credit ratings agencies – Fitch, Moody’s and S&P, while Australia still had five.
S&P reached Australian shores in the mid-80’s – long after it had developed its first investor index, the S&P500, in 1957 and long after it had begun charging for ratings in the late 1960s.
It has had a massive impact on the Australian funds ratings industry with 94% of respondents in Money Management’s 2010 Rate the Raters survey saying they leaned on S&P’s ratings services.
More News >
Discuss: Standard & Poor’s to pull out of Australian ratings market