Australian financial services (AFS) licensees will be prevented from disclosing their ratings to clients under changes outlined by the corporate regulator.

The Australian Securities and Investments Commission (ASIC) says AFS licensees can’t use their credit rating to influence a client’s decision, and must seek permission from a ratings agency to cite a credit rating in prospectuses or product disclosure statements (PDS).

AFS licensees have until April 30 to remove any credit rating information from company materials unless permission is granted by a ratings agency.

In a guidance note released by ASIC, licensees are assured they will not breach disclosure requirements if ratings information is absent from a prospectus or PDS.

The announcement comes nearly two years after the Federal Government launched an inquiry into the regulation of credit ratings agencies, whose flawed analysis of supposedly safe institutions was crucial in the downfall of financial markets.