New SEC rules aim to curb credit rating agencies

WASHINGTON, DC - The US Securities and Exchange Commission (SEC) is to introduce new rules aimed at increasing the accountability of credit rating agencies (CRAs). The new rules would involve banning ratings agencies from consulting with investment banks whose products they rate. SEC chairman Christopher Cox told the Senate Banking Committee that, as part of its investigation into how securities such as collateralised debt obligations, which CRAs were blamed for exacerbating the subprime crisis by giving low-risk ratings to high risk and ultimately illiquid products, were rated, his staff had seen "that the ratings process used to rate these products may have been less quantitatively developed than was generally believed".

The rules aim to increase the accountability of CRAs by requiring them to release the information used to rate subprime mortgage-backed securities to allow consumers to judge how the agencies operate and to compare the performance of the various agencies.

The new rules will be introduced "in the near future", according to Cox.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here