U.S. securities regulators have voted to go ahead with two major sets of rule reforms that aim to address vulnerabilities exposed by the financial crisis — toughening requirements on credit rating agencies (CRAs), and amending the rules for the issuance of asset-backed securities — in an effort to close regulatory gaps revealed in the crisis, enhance transparency and bolster investor protection.

The U.S. Securities and Exchange Commission (SEC) Wednesday voted to adopt new requirements that are designed to enhance governance, protect against conflicts of interest, and increase transparency at rating agencies. The measures are designed to improve the quality of credit ratings and increase accountability at the raters. The new requirements deal with internal controls, conflicts of interest, the disclosure of credit rating performance statistics, procedures to protect the integrity and transparency of rating methodologies, the transparency of credit ratings, and proficiency standards for credit analysts. Additionally, rating agency CEOs must annually certify the effectiveness of their internal controls, and attest to the independence of their ratings.

“This expansive package of reforms will strengthen the overall quality of credit ratings, enhance the transparency of credit rating agencies and increase their accountability,” said SEC chair, Mary Jo White. “Today’s reforms will help protect investors and markets against a repeat of the conduct and practices that were central to the financial crisis.”

Some of the amendments will become effective 60 days after publication in the Federal Register, others take effect after nine months, and certain requirements will be implemented in 2015.

At the same time, the SEC also adopted revisions to its rules governing the disclosure, reporting, and offering process for asset-backed securities (ABS). These reforms aim to enhance transparency, improve investor protection, and facilitate capital formation in the securitization market, the SEC says.

Among other things, the new rules require loan-level disclosure for certain assets, such as residential and commercial mortgages and auto loans. They provide more time for investors to review and consider a securitization offering; revise the eligibility criteria for using an expedited offering process, “shelf offerings”; and they revise reporting requirements.

“These are strong reforms to protect America’s investors by enhancing the disclosure requirements for asset-backed securities and by making it easier for investors to review and access the information they need to make informed investment decisions,” said SEC chair White. “Unlike during the financial crisis, investors will now be able to independently conduct due diligence to better assess the credit risk of asset-backed securities.”

The SEC notes that the financial crisis revealed that many investors in the securitization market were not fully aware of the risks in the underlying securitized assets and relied too heavily on credit ratings, which did not appropriately evaluate the credit risk of the securities. It says that the crisis also exposed a lack of transparency and oversight in securitization transactions, which these reforms aim to address.

The revised ABS rules become effective 60 days after publication in the Federal Register, although issuers have a year to comply with certain requirements, and offerings of ABS backed by residential and commercial mortgages, auto loans, auto leases, and debt securities have two years to comply with the asset-level disclosure requirements.