Published on December 29, 2017 at 02:43PM
Credit rating agencies under Securities and Exchange Commission oversight show improved compliance, increased information technology resources, and continued competition, according to two SEC staff reports released today on nationally recognized statistical rating organizations (NRSROs).
“NRSROs are continuing to display a greater awareness of their obligations as regulated entities,” said Jessica S. Kane, Acting Director of the SEC’s Office of Credit Ratings. “The staff will continue to engage with the firms and monitor potential risks to promote compliance, strengthen governance, and ensure that NRSROs provide robust disclosure for the benefit of investors.”
The annual exam report, required by the 2010 Dodd-Frank Act, summarizes the staff examinations of each NRSRO. The staff observed improvements in the firms’ compliance monitoring and internal audit functions. The report notes that NRSROs have further refined their policies, procedures, and controls related to securities laws and rules.
The annual report, mandated by the 2006 Credit Rating Agency Reform Act, discusses the state of competition, transparency, and conflicts of interest among NRSROs and identifies applicants for NRSRO registration. The staff notes that smaller NRSROs continue to actively compete with more established rating agencies, and some are specializing in particular rating categories and classes.
The following SEC staff contributed to the examinations and reports: Diane Audino, Michael Bloise, David Bobillot, Sondra Boddie, Rita Bolger, Patrick Boyle, Aaron Byrd, Roseann Catania, Kristin Costello, Doreen Crawford, Scott Davey, Franco Destro, Jill Flory, Ilya Fradkin, William Garnett, Kenneth Godwin, Michael Gonzalez, Barry Huang, Julia Kiel, Russell Long, Chichita Nickens, David Nicolardi, Sam Nikoomanesh, Kevin O’Neill, Harriet Orol, Abraham Putney, Jeremiah Roberts, Mary Ryan, Cynthia Sargent, Charles Schiller, Andrew Smith, Alexa Strear, Warren Tong, Evelyn Tuntono, Chris Valtin, Kevin Vasel, Andrew Vita, and Michele Wilham.