It is not surprising that the Australian government's plans to regulate the rating agencies, announced last week, were welcomed by the rating agencies. Despite the tough sounding rhetoric that went with the announcement, the regulation will largely only serve to make explicit what was previously implicit. The rating agencies will benefit from this to the extent that it will bring greater transparency to their activities and may give the financial markets and the public at large, greater confidence in them.ASIC will no longer exempt the rating agencies from having to hold an Australian Financial Services Licence. Exemption was previously granted on the basis that the rating agencies were regulated by the US and European regulators anyway and were obligated to abide by the International Organisation of Securities Commissions' (IOSCO) Code of Conduct Fundamentals for Credit Rating Agencies. In addition, the rating agencies will have to submit to ASIC an Annual Compliance Report outlining in detail how they have complied with IOSCO's code of conduct. In September, IOSCO urged that a globally consistent regulatory approach to monitoring the activities of the rating agencies be implemented and that its code of conduct should provide the framework for this. The changes announced by the Federal government are consistent with IOSCO's wishes and to the extent that additional requirements are imposed by the US and European regulators, those requirements will be adopted by ASIC.Perhaps of greater significance is the government's intention to convene an investor roundtable to discuss the role that investors can play in demanding improvements in the development, due diligence assessment and usage of ratings, and its desire to raise and promote these initiatives at an international level. To date investors have been relatively passive in their acceptance of credit ratings.However, despite the fact that it is the subject of the credit rating that pays for the rating, it is the user of the rating that drives credit rating agencies' business. If investors don't demand or value ratings, there won't be any.In emails to brokers and managers ANZ explained the revised credit policy as a change made "in response to the softening in the economic environment."