News release: “The Securities and Exchange Commission today voted to formally propose a comprehensive series of credit rating agency reforms to bring increased transparency to the ratings process and curb practices that contributed to recent turmoil in the credit markets. The first part of the Commission’s rule proposal would:

• Prohibit a credit rating agency from issuing a rating on a structured product unless information on assets underlying the product was available.
• Prohibit credit rating agencies from structuring the same products that they rate.
• Require credit rating agencies to make all of their ratings and subsequent rating actions publicly available.
• Attack the practice of buying favorable ratings by prohibiting anyone who participates in determining a credit rating from negotiating the fee that the issuer pays for it.
• Prohibit gifts from those who receive ratings to those who rate them, in any amount over $25.
• Require credit rating agencies to publish performance statistics for 1, 3, and 10 years within each rating category, in a way that facilitates comparison with their competitors in the industry.
• Require disclosure by the rating agencies of the way they rely on the due diligence of others to verify the assets underlying a structured product.
• Require disclosure of how frequently credit ratings are reviewed; whether different models are used for ratings surveillance than for initial ratings; and whether changes made to models are applied retroactively to existing ratings.”