Public Comments

Overview

The Commission is proposing rule amendments and a new rule that would impose additional requirements on nationally recognized statistical rating organizations ("NRSROs'). The proposed amendments and rule would require an NRSRO: to furnish a new annual report describing the steps taken by the firm's designated compliance officer during the fiscal year with respect to compliance reviews, identifications of material compliance matters, remediation measures taken to address those matters, and identification of the persons within the NRSRO advised of the results of the reviews; to disclose additional information about sources of revenues on Form NRSRO; and to make publicly available a consolidated report containing information about revenues of the NRSRO attributable to persons paying the NRSRO for the issuance or maintenance of a credit rating. The Commission is proposing these rules, in conjunction with a separate release being issued today adopting certain rule amendments, to further address concerns about the integrity of the credit rating procedures and methodologies at NRSROs. Finally, at this time, the Commission is announcing that it is deferring consideration of action with respect to a proposed rule that would have required an NRSRO to include, each time it published a credit rating for a structured finance product, a report describing how the credit ratings procedures and methodologies and credit risk characteristics for structured finance products differ from those of other types of rated instruments, or, alternatively, to use distinct ratings symbols for structured finance products that differentiated them from the credit ratings for other types of financial instruments. The Commission is also soliciting comments regarding alternative measures that could be taken to differentiate NRSROs' structured finance credit ratings from the credit ratings they issue for other types of financial instruments through, for example, enhanced disclosures of information. The Commission also is soliciting comment on whether the rule amendments being adopted today in a separate release designed to remove impediments to determining and monitoring non-issuer-paid credit ratings for structured finance products should be extended to create a mechanism for determining non- issuer-paid credit ratings for structured finance products that were issued prior to the rule becoming effective (e.g., to allow for non- issuer-paid credit ratings for structured finance products of the 2004- 2007 vintage). The Commission strongly encourages market participants and all others to provide their views.