Washington, D.C., Sept. 24, 2007 – LAWFUEL- The Law Newswire – The Securities and Exchange Commission issued orders today granting the registrations of seven credit rating agencies as nationally recognized statistical rating organizations (NRSRO). The firms are the first to be registered with the Commission under the Credit Rating Agency Reform Act of 2006.
The seven firms registered as NRSROs are:
A.M. Best Company, Inc.
Japan Credit Rating Agency, Ltd.
Moody’s Investors Service, Inc.
Rating and Investment Information, Inc.
Standard & Poor’s Ratings Services
The Credit Rating Agency Reform Act and the Commission’s new rules require registered credit rating agencies to disclose their procedures and methodologies for assigning ratings. The NRSROs are also required to make public certain performance measurement statistics including historical downgrades and default rates.
“The Commission’s newly-granted oversight of credit rating agencies will protect investors and enhance the reliability of credit ratings by fostering accountability, transparency, and competition in the credit rating industry,” said SEC Chairman Christopher Cox.
The Commission’s final rules implementing the Credit Rating Agency Reform Act took effect on June 26, 2007. Each of the applications for registration was acted upon by the Commission within 90 days, as generally required by law.
Under the Credit Rating Agency Reform Act, an NRSRO may be registered with respect to up to five classes of credit ratings: (1) financial institutions, brokers, or dealers; (2) insurance companies; (3) corporate issuers; (4) issuers of asset-backed securities; and (5) issuers of government securities, municipal securities, or securities issued by a foreign government. A.M. Best Company, Inc., is registered with respect to the first four classes of credit ratings; the other six firms are registered with respect to all five classes.
By October 8, 2007, each of these NRSROs is required to make public on its Web site its current Form NRSRO and non-confidential exhibits.