Rule 17g-3 |
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Annual Audited Financial Statements to be Furnished by
Nationally Recognized Statistical Rating Organizations
(a) A credit rating agency registered with the Commission as a nationally recognized statistical rating organization (“rating organization”) annually must furnish the Commission, at its principal office in Washington, DC, with audited financial statements. The audited financial statements must be prepared in accordance with generally accepted accounting principles, must comply with applicable provisions of Regulation S-X (§210.1-01 - §210.12-29, of this chapter), must be as of the fiscal year end indicated on the rating organization’s current Form NRSRO, and must be furnished not more than 90 calendar days after the end of the fiscal year.
(b) The audited financial statements must include the following supporting schedules:
(1) A schedule separately itemizing the following aggregate revenues (as applicable):
(i) Revenue from determining and maintaining credit ratings;
(ii) Revenue from subscribers;
(iii) Revenue from granting licenses or rights to publish credit ratings;
(iv) Revenue from determining credit ratings that are not made readily accessible (private ratings); and
(v) Revenue from all other services and products offered by the rating organization (include descriptions of any major sources of revenue);
(2) A schedule providing the total aggregate and median annual compensation of the rating organization’s credit analysts; and
(3) A schedule listing the 20 largest issuers and subscribers that used credit rating services provided by the rating organization by amount of net revenue received by the rating organization and its affiliates from the issuer or subscriber during the fiscal year. In addition, add to the list any obligor or underwriter that used credit rating services provided by the rating organization if the net revenue received by the rating organization and its affiliates from the obligor or underwriter during the fiscal year equaled or exceeded the net revenue received from the 20th largest issuer or subscriber. Include the net revenue amount for each customer.
Note to paragraph (b)(3): A customer would have used the "credit rating services" of the rating organization if the customer was any of the following: an obligor that is rated by the rating organization (regardless of whether the obligor paid for the credit rating); an issuer that has securities or money market instruments rated by the rating organization (regardless of whether the issuer paid for the credit rating); any other person that has paid the rating organization to determine a credit rating with respect to a specific obligor, security, or money market instrument; or a subscriber to the credit ratings of the rating organization. In calculating net revenue received from a customer, the rating organization should include all fees, sales proceeds, commissions, and other revenue received by the rating organization and its affiliates for any type of service or product, regardless of whether related to credit rating services, and net of any fees, sales proceeds, rebates, and monies paid to the customer by the rating organization and its affiliates.
(c) The audited financial statements must be furnished in accordance with the following:
(1) They must be certified by an accountant who is qualified and independent in accordance with paragraphs (a) through (c) of §210.2-01 of this chapter, and the accountant must give an opinion on the financial statements and schedules in accordance with paragraphs (a) through (d) of §210.2-02 of this chapter; and
(2) The rating organization must attach to the financial statements a signed statement by a duly authorized person at the rating organization that the person has responsibility for the financial statements and, to the best knowledge of the person, the financial statements fairly present, in all material respects, the financial condition, results of operations, and cash flows of the rating organization for the period presented.
(d) The Commission may grant an extension of time from any requirements in this section either unconditionally or on specified terms and conditions on the written request of a rating organization if the Commission finds that such exemption is necessary or appropriate in the public interest, and is consistent with the protection of investors. |
