SIFMA Supports SEC Proposals Allowing Continued Use of Ratings

The Securities Industry and Financial Markets Association’s (SIFMA) Credit Rating Agency Task Force supports the aspects of the Securities and Exchange Commission’s (SEC) proposal on rules relating to nationally recognised statistical rating organisations that allow the continued use of ratings. Deborah Cunningham, co-chair of SIFMA’s Credit Rating Agency Task Force and chief investment officer of Federated Investors, said: “It is important that we guard against embedded over-reliance on ratings in SEC regulations, as well as in investor guidelines, state laws, Basel II, and bilateral contracts. At the same time, we understand and appreciate that the written proposal will, when released, continue to allow reliance on ratings as appropriate in the areas of Rule 2a-7 and net capital rules. Simply stripping ratings out of the rules would not have been helpful. The solution to the credit rating problems is to allow continued appropriate use of ratings, while adding greater transparency to the process and more information for those who use ratings, so that ratings can be more effective risk management and investment tools.”


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