SEC Releases Report on Credit Rating Agency Independence as Required under Dodd-Frank | Practical Law

SEC Releases Report on Credit Rating Agency Independence as Required under Dodd-Frank | Practical Law

The SEC published a report to Congress on credit rating agency independence, as required under the Dodd-Frank Act.

SEC Releases Report on Credit Rating Agency Independence as Required under Dodd-Frank

by Practical Law Corporate & Securities
Published on 25 Nov 2013 • USA (National/Federal)
The SEC published a report to Congress on credit rating agency independence, as required under the Dodd-Frank Act.
On November 21, 2013, the staff of the SEC's Office of Credit Ratings published a report to Congress, as required under Section 939C of the Dodd-Frank Act, summarizing the results of its study on the independence of nationally recognized statistical rating organizations (NRSROs) and how NRSRO independence affects the ratings issued by NRSROs. The study focused on:
  • Management of conflicts of interest raised by an NRSRO providing other services to issuers in addition to ratings, including risk management advisory services, ancillary assistance or consulting services.
  • The potential impact of rules prohibiting an NRSRO from providing other services to an issuer if it also provides ratings to the issuer.
Based on its findings, the staff stated that it will not recommend that the SEC amend its rules governing an NRSRO's provision of ancillary services. However, the staff will continue to consider and monitor the potential conflicts of interest that arise when an NRSRO provides both ratings and ancillary services to issuers.
For more information on credit ratings and credit rating agencies, see Practice Note, Credit Ratings and Credit Rating Agencies.
For more information on the key provisions of the Dodd-Frank Act relating to credit rating agencies, see Practice Note, Summary of the Dodd-Frank Act: Credit Rating Agencies.