- The Securities and Exchange Commission today announced that it has voted to adopt rule amendments codifying an existing exemption for credit rating agencies registered with the Commission as nationally recognized statistical rating organizations (NRSROs
EFM's managed portfolio is largely comprised of smaller, non-investment-grade entities that lack public ratings from nationally recognized statistical rating organizations (NRSROs
The Securities and Exchange Commission was charged by the Dodd-Frank Act to establish the Office of Credit Ratings to enhance the regulation, accountability and transparency of nationally recognized statistical rating organizations (NRSROs
In response to this pressure, the SEC issued a 2003 Concept Release, Ratings Agencies and the Use of Credit Ratings under the Federal Securities Laws, which considered the following issues: NRSRO
alternatives, recognition criteria for NRSROs
, information flow and ratings processes, conflicts of interest, unfair practices, rating triggers, and regulatory oversight (https://www.sec.gov/rules/ concept/33-8236.htm).
The Securities and Exchange Commission (SEC) has issued a report summarising the staff's observations and concerns arising from the examinations of 10 credit rating agencies registered with the SEC as Nationally Recognized Statistical Rating Organizations (NRSROs
) and subject to Commission oversight.
The three main agencies (Moody's, Standard & Poor's and Fitch Ratings) were the first that the SEC designated as nationally recognized statistical rating organizations (NRSROs
The SEC now lists 10 companies as NRSROs
. One of those companies, LACE Financial, was bought by Kroll, which gives the merged company NRSRO
status, while Whitney Advisory awaits the SEC's green light on its application.
(4) Because Ford Credit was unable to obtain any nationally recognized statistical rating organizations' (NRSROs
) (5) consent to include their ratings, Ford Credit was unable to comply with Rules 1103(a)(9) and 1220 of Regulation AB, "which requires the disclosure of NRSROs
and their ratings in securities registration documentation." (6) In response to Ford Credit's letter, the SEC issued a no-action letter (7) until January 24, 2011, granting NRSROs
a six-month period to determine how best to comply with the new legislation.
The proposed rules would require nationally recognized statistical rating organizations (NRSROs
) to include information regarding the representations, warranties and enforcement mechanisms available to investors in an ABS offering in any report that accompanied a credit rating issued in connection with an offering, including a preliminary credit rating.
Since 1975, the Securities and Exchange Commission has limited competition in the market for credit ratings by anointing only certain firms as ''Nationally Recognized Statistical Rating Organizations'' (NRSROs
Hybrids are rated by NRSROs
, and each of the rating agencies evaluates each issue and reflects varying levels of "debt-like" risks and "equity-like" risks.