The U.S. Securities and Exchange Commission approved rule amendments that are intended to increase transparency and accountability at credit rating agencies, the regulator announced Wednesday.

This is the second set of CRA reforms since the SEC received regulatory authority from Congress to register and oversee the rating agencies. The initial rules were implemented in June 2007. The new measures impose additional requirements on CRAs, and the SEC also proposed additional measures related to transparency and competition.

“These comprehensive rules touch every aspect of the credit rating process – from conflicts of interest, to publication of ratings methodologies, to disclosure of ratings track records,” said SEC chairman Christopher Cox. “The SEC’s examinations of credit rating agencies uncovered serious deficiencies that these rules will address, so that investors and markets will have better information to guide investment decisions.”

The SEC said its actions were informed by the agency’s extensive 10-month examination of three major CRAs that found significant weaknesses in ratings practices.

In Canada, the securities regulators have also proposed taking jurisdiction over the CRAs and reducing reliance on credit ratings in the securities legislation as part of their response to the financial market crisis.

Public comments on the SEC’s proposed amendments are due within 45 days.

IE