On February 2, the Securities and Exchange Commission adopted amendments to existing rules and re-proposed new rules for Nationally Recognized Statistical Rating Organizations (NRSROs).
First, the SEC adopted rule amendments updating Form NRSRO to provide increased disclosure of performance measurements statistics and the procedures and methodologies used by NRSROs in determining credit ratings for structured finance products and other debt securities. Second, the SEC adopted rule amendments requiring NRSROs to make, keep and preserve additional rating records and to require a portion of these records to be made publicly available. Third, the rule amendments require NRSROs to make publicly available in eXtensible Business Reporting Language (XBRL) format on their websites a random sample of 10% of the ratings history for each class in which they are registered and have issued 500 or more issuer-paid credit ratings, with each new ratings action to be reflected in such histories no later than six months after they are taken. Finally, the SEC adopted an amendment requiring NRSROs to provide the SEC with an additional annual report.
The SEC also proposed rules requiring NRSROs to publicly disclose in XBRL format their credit rating histories for all outstanding issuer-paid credit ratings issued on or after June 26, 2007. This amendment would, as proposed, permit NRSROs to delay publicly disclosing a rating action for up to 12 months. The SEC additionally re-proposed an amendment that would prohibit an NRSRO from issuing an issuer-paid rating for a structured finance product unless the information about the product provided to the NRSRO to determine the rating and thereafter monitor it is made available to other persons. Finally, the SEC requested comment regarding the benefits of applying its disclosure rules for issuer-paid credit ratings to subscriber-paid credit ratings.