From: Sandeep Gopalan [sandeep.gopalan@queens.oxford.ac.uk]
Sent: Tuesday, July 22, 2003 9:52 PM
To: Rule-Comments
Subject: Re: S7-12-03 

Commissioners,
 
I would like to submit the following comments with regard to the Concept 
Release pertaining to the regulation of credit rating agencies:
 
1. Regulation is essential given the failure by the industry to keep its 
own house in order.

2. Regulation is also imperative if the investing public's trust in these 
agencies is to be restored, especially in the context of the unflattering 
record of credit raters as evidenced by their failure in the case of Enron.

3. Such regulation should cover all aspects of the business.

4. Regulatory barriers to entry must be eased.

5. The SEC must be bound to accord or deny approval to applications in a 
time-bound manner.

6. Gate-keeper restrictons must be abandoned in favour of qualitative 
checks as ultimately credit raters should sink or swim based on the 
quality of their ratings.

7. With regard to use of non-public information, this must be allowed.

8. Credit raters must disclose sources used to arrive at ratings decisions, 
and where non-public information is used, this must be disclosed without 
reference to the quality or nature of such non-public information.

9. Ratings decisions must be explained, showing clear bases for particular 
ratings.

11. There must also be an express avowal of the truth of the statements 
contained in the rating and the affirmation that the agency believes the 
rating to be a true reflection of the credit risk.

10. Conflicts of interest, where in existence must be clearly revealed.
 
In addition to the above, I respectfully draw your attention to my article, 
"Time to regulate this mess" published on 21st July, 2003, in the National 
Law Journal, available at http://www.nlj.com/oped/072103gopalan.shtml.
 
Thanking you,
 
Sincerely,
 
Sandeep Gopalan
The Queen's College
Oxford