SEC to Propose New Rules for Credit Rating Agencies
 
May 5, 2008
 

On April 22, 2008, SEC Chairman Christopher Cox, in a meeting with the Senate Committee on Banking, Housing and Urban Affairs, indicated that he expects the SEC to propose additional rules “in the near future” to advance accountability, transparency and competition in the credit rating industry. Chairman Cox stated that he believes the new rules may include (1) enhanced disclosure requirements regarding a credit rating agency’s performance ratings and (2) disclosure requirements regarding the assets underlying mortgage-backed securities, collateralized debt obligations (CDOs) and other types of structured finance products the credit rating industry rates. In addition, the SEC staff hopes that the new rules will foster competition by providing other credit rating agencies, including new nationally recognized statistical rating agencies (NRSROs), a chance to identify flaws or opportunities for improvement in the approach of their competitors, or to demonstrate to investors that their credit ratings perform better.

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