The extent of the regulation of credit-rating agencies includes “giving the SEC the authority to step in when it sees conflicts of interest or anti-competitive practices but does not give the SEC the authority to regulate rating agencies criteria or methods.”
In addition the bill “specifies standards for firms seeking to be designated as ‘nationally recognized’ rating agencies. The agencies must have a 3-year track record, and the SEC can deny national recognition to firms without the resources to consistently produce high-quality assessments of debt issued by corporations and governments.”
A Standard & Poor’s (S&P) spokesperson Marjory Appel made some positive comments about the bill, “The current version takes a constructive approach to increasing competition and transparency in the credit ratings industry. We are encouraged that further improvements and clarifications will be made in order to safeguard the independence of the credit rating process.”
This bill seems a positive one for all involved. A more transparent industry and competitive environment will benefit consumers and industries that work directly with credit-rating agencies. Let us know your feelings about this legislation.
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