Use of Credit Ratings Information After Passage of Dodd-Frank Act

Sheppard Mullin Richter & Hampton LLP
Contact

The practice of marketing registered public offerings of debt securities with credit ratings information and related disclosure of issuer credit ratings in Securities and Exchange Commission filings will change with the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

One of Dodd-Frank’s many reforms was aimed at credit rating agencies. Effective immediately, Dodd-Frank Section 939G repealed SEC Rule 436(g) promulgated under the Securities Act of 1933. Rule 436(g) stated that in general, credit ratings were not deemed “expertized” portions of registration statements. As non-expertized content, issuers did not need consent from credit rating agencies to use their ratings in registration statements, and credit rating agencies were not subject to strict liability under Section 11 of the Securities Act for the opinion refl ected in their ratings. As providing consents would subject credit ratings agencies to liability under Section 11 of the Securities Act, credit ratings agencies have announced they will not consent to the use of their ratings in registration statements or prospectuses.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

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.

© Sheppard Mullin Richter & Hampton LLP | Attorney Advertising

Written by:

Sheppard Mullin Richter & Hampton LLP
Contact
more
less

Sheppard Mullin Richter & Hampton LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.