SEC Releases Final NRSRO Rules
Dec 8, 2009
On November 23, 2009, the Securities and Exchange Commission (SEC) released final NRSRO rules in SEC Release 34-61050 (Release), Amendments to Rules for Nationally Recognized Statistical Rating Organizations. The Release imposes additional disclosure and conflict of interest requirements on national recognized statistical rating organizations (NRSROs) in order to address concerns about the integrity of the credit rating procedure and methodologies at NRSROs.
The rules will take effect 60 days after publication in the Federal Register, but NRSROs will not be required for fully comply with the new rules until six months after publication.
SEC Release No. 34-61050
The SEC also released a proposed rulemaking regarding NRSROs, SEC Notice 34-61051, Proposed Rules for Nationally Recognized Statistical Rating Organizations. The proposed rules would impose additional requirements on NRSROs to furnish a new annual report describing the steps taken by the firm’s designated compliance officer during the fiscal year with respect to compliance reviews, identification of material compliance matters, remediation measures taken to address those matters, and identification of the person within the NRSRO advised of the results of the reviews; to disclose additional information about sources of revenue on Form NRSRO; and to make publicly available a consolidated report containing information about revenues of the NRSRO attributable to persons paying the NRSRO for the issuance of maintenance of credit rating. Notice 34-61051 does not include recommendations for ratings of structured financial products, but solicits alternate measures that could be taken to differentiate NRSRO’s structured financial credit ratings from the credit ratings they issue for other types of financial instruments.
SEC Release No. 34-61051.