PrintOn July 21st Treasury proposed legislation to strengthen regulatory oversight of national credit rating agencies by amending Section 15E of the 34 Act to require agencies to (1) register with the SEC as “nationally recognized statistical rating organizations” (NRSROs), (2) create internal compliance organizations under a CCO, (3) implement written policies, procedures and codes of ethics, (4) include greatly increased risk and reliability related disclosures in their ratings reports, and (5) file annual regulatory reports, including compliance certifications. Among other topics, the mandated policies and procedures must address conflicts of interest in the rating process.
The proposal directs the SEC to create an office dedicated to overseeing NRSROs and to adopt rules to change industry business pricing and business practices. This would amend the Credit Rating Agency Reform Act of 2006 and its associated regulations, which provided for optional registration.
Our detailed analysis of the proposal is available here.
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