Ramarathnam, who begins her new role later this month, will provide leadership and direction for various office activities including examinations and monitoring of NRSROs
, rulemaking and related initiatives.
As recently as 2004, only four ratings firms were authorized by the SEC to provide NRSRO
ratings, and there are currently only 10 NRSROs
registered with the SEC, as seen in the Exhibit.
Section 15E(s)(4)(D) requires that the SEC adopt rules requiring NRSROs
at the time a rating is produced to disclose the certification to the public in a manner that allows the public to determine the adequacy and level of due diligence services provided by a third party.
The report notes that the staff made various recommendations to the NRSROs
to address the staff's concerns and that in some cases the NRSROs
have already taken steps to address such concerns.
Currently, the SEC has listed seven other designated NRSROs
If specific NRSROs
are named in the guidelines, we ask the investors to consider loosening that configuration.
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.
Hence the expansion of NRSROs
, which now number 10.
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.
The three rating company incumbents-Moody's, S&P, and Fitch--were immediately "grandfathered" into the NRSRO
category, and only the NRSROs
' ratings would be valid for the determination of the broker-dealers' capital requirements.
These five have enjoyed a competitive advantage over their peers because the guidelines for many government, mutual fund and other institutional investment portfolios not only specify minimum credit ratings for their securities, but also require that the ratings come from NRSROs
A formal complaint procedure needs to be instituted so that rated companies can report any instances of perceived pressures by NRSROs