Thursday, May 24, 2007
The Securities and Exchange Commission today voted to adopt final rules to implement provisions of the Credit Rating Agency Reform Act of 2006 (Public Law No. 109-291), which was enacted on Sept. 29, 2006. The Credit Rating Agency Reform Act defines the term "nationally recognized statistical rating organization" (NRSRO), provides authority for the Commission to implement registration, recordkeeping, financial reporting, and oversight rules with respect to registered credit rating agencies, and directs the Commission to issue final rules no later than 270 days after its enactment (or by June 26, 2007).
"The goal of this new law is to improve credit ratings quality by fostering competition, accountability, and transparency in the credit rating industry," said SEC Chairman Christopher Cox. "The heart of the Act calls on the Commission to replace the barriers to entry that had previously existed. The replacement is a transparent and voluntary Commission registration system that favors no particular business model."