SEC issues Concept Release on role and function of credit rating agencies
The US Securities and Exchange Commission (SEC) has now published its concept release on the role and function of credit rating agencies.
The release, which was published on 4 June 2003, comes in response to a requirement in the Sarbanes-Oxley Act 2002 and follows on from the Interim Report issued earlier this year. It seeks comments from market-users on a number of issues including:
- Whether the designation of credit rating agencies in the US as nationally recognised statistical rating organisations (NRSROs) should continue
- What, if any, alternative approaches could be adopted by the SEC in ensuring that high standards are met by ratings service providers, for example, in respect of acrreditation, oversight, access to rating agency records etc
- The suitability of internal credit models as an alternative to external rating bandings for computing capital adequacy requirements for US regulated broker-dealers
- How ratings service providers should deal with potential conflicts of interest
- Whether anti-competitive practices exist within the credit ratings industry
- How the transparency of the credit ratings process might be enhanced
The full text of the concept release can be accessed at www.sec.gov/rules/concept/33-8236.htm.