Credit Rating Disclosures: SEC Proposes to Require Disclosure of Credit Ratings Information; Reopens Comment Period on Eliminating References to NRSROs

November 23, 2009
Amid concerns that overreliance on credit ratings and rating agencies may have contributed to the upheavals in the credit markets that led to the recent economic downturn, the SEC has issued three releases to address what it views as undue reliance on these ratings and to encourage investors to conduct sufficient due diligence with respect to the underlying securities. In one release, the SEC is proposing to require the disclosure of information regarding credit ratings used by registrants in connection with a registered offering of securities and potential conflicts of interest with respect to such credit ratings. The comment period for these proposals ends on December 14, 2009. In a second release, the SEC reopened the comment period on, or deferred consideration of, certain proposed rule amendments that would remove references to nationally recognized statistical ratings organizations. The comment period for these proposals ends on December 8, 2009. In a third release, the SEC adopted amendments to certain of its rules and forms to remove references to ratings of nationally recognized statistical ratings organizations, effective November 12, 2009. This Dechert OnPoint discusses the proposed rule amendments.