SEC Report on Assigned Credit Ratings

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On December 18, 2012, the SEC released a Report to Congress on Assigned Credit Ratings, as required by Section 939F of the Dodd-Frank Act, to analyze the feasibility of establishing an assignment system for NRSROs to rate structured finance products, as proposed in the so-called “Franken Amendment.” The report describes the costs, benefits, and considerations of three courses of action: (i) establishing an assignment system; (ii) modifying the program established under Rule 17g-5 under the Exchange Act; and (iii) employing alternative compensation methods to incentivize accurate credit ratings. The report recommends that as a next step, the SEC convene a roundtable at which proponents and critics of the three courses of action can discuss the study and its findings. Report.

Topics:  Credit Ratings, Dodd-Frank, SEC

Published In: Administrative Agency Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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