Alert December 02, 2008

SEC to Consider Action on Rating Agency Requirements

The SEC announced that it will hold an open meeting on Wednesday, December 3, 2008 at 10:00 a.m. to consider whether to adopt rule amendments that would impose additional requirements on nationally recognized statistical rating organizations (“NRSROs”) designed to address concerns about the integrity of credit rating procedures and methodologies.  The SEC’s announcement also indicated it will consider “whether to propose and re-propose certain proposed rules relating to transparency and competition concerning NRSROs.”  Earlier this year, the SEC proposed rules designed to address conflicts of interest for NRSROs, such as those posed by gifts to credit analysts from the issuers of securities being rated; the proposal also provided for public disclosure of performance statistics, ratings, ratings actions and information on rating methodologies, with a particular focus on structured products.