Market Regulation

CFA Calls on SEC to Hold Credit Rating Agencies Accountable for Improper Conduct

In a letter to Securities and Exchange Commission (SEC) Chairman Jay Clayton, CFA is calling on the SEC to increase the rigor of its oversight over credit rating agencies. Shoddy and abusive practices at credit rating agencies are generally agreed to have played a central role in triggering the recent financial crisis, and serious shortcomings in the SEC’s implementation of credit rating agency reforms mandated in the Dodd-Frank Act threaten to once again put our financial system at risk. CFA therefore urges the SEC to use every tool at its disposal to increase the rigor of credit rating agency oversight, including those discussed in recent research by University of San Diego Law Professor Frank Partnoy. Publishing the identities of ratings agencies that have failed to adhere to applicable regulatory requirements would be a meaningful first step toward bringing increased accountability in this crucial area.

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