The SEC’s Annual Staff Report on Nationally Recognized Statistical Rating Organizations

Staff Report, Securities and Exchange Commission
Staff Report, Securities and Exchange Commission report

The Securities and Exchange Commission released a staff study discussing the current conditions of competition, transparency, and conflicts of interest among nationally recognized statistical rating organizations (NRSROs).

Staff report overview

SEC Chair Gary Gensler has noted that the Office of Credit Ratings’ oversight of Nationally Recognized Statistical Rating Organizations is an important part of the Commission’s efforts to protect investors and preserve the integrity of the rating process. The OCR‘s efforts to guarantee honest and reliable credit scores will be detailed in the agency’s 2022 staff report.

Investors are safeguarded by the Office of Financial Markets’ risk-based assessments of NRSROs, which, as noted by Lori Price, who heads the organization, “focus on specific NRSRO activities and assess compliance with applicable laws and rules of Credit Ratings.” Our yearly examinations are summarized in the detailed staff report, which also contains information about NRSROs, their credit rating firms, and the industry as a whole.

Several criteria were taken into account during the staff’s NRSRO reviews in 2022, as detailed in the report.
how COVID-19 will affect commercial real estate credit ratings, whether or not illegal forms of communication are used in business and other rating surveillance activities.

Employee ownership of securities at the NRSRO;

The impact of promoting and creating standalone ESG products on credit ratings; and evaluations of Chinese companies.

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