Oversight of Credit Rating Agencies Registered as Nationally Recognized Statistical Rating Organizations

Table of Contents:

I. BACKGROUND I.

II. TIMING OF FINAL RULES II.

III. EFFECTIVE DATE III

IV. REVIEW OF COMMISSION RULES IV.

V. THE FINAL RULES V.

A. Rule 17g-1 Registration Requirements A.

1. Paragraph (a) of Rule 17g-1 1.
2. Paragraph (b) of Rule 17g-1 2.
3. Paragraph (c) of Rule 17g-1 3.
4. Paragraph (d) of Rule 17g-1 4.
5. Paragraph (e) of Rule 17g-1 5.
6. Paragraph (f) of Rule 17g-1 6.
7. Paragraph (g) of Rule 17g-1 7.
8. Paragraph (h) of Rule 17g-1 8.
9. Paragraph (i) of Rule 17g-1 9.

B. Form NRSRO B.

1. Checkboxes indicating nature of submission 1.
2. Item 1 (Identifying information) 2.
3. Certification 3.
4. Item 2 (Legal status, place of formation, fye) 4.
5. Item 3 (Credit Rating Affiliates) 5.
6. Item 4 (Compliance officer) 6.
7. Item 5 (Method of making Form and Exhibits ) 7.
8. Item 6 (Classes of credit ratings for which ) 8.
9. Item 7 (Classes of credit ratings covered by )9.
10. Item 8 (Potential statutory disqualifications) 10.
11. Exhibit 1 (Credit Ratings Performance Statistics) 11.
12. Exhibit 2 (Procedures and methodologies for ) 12.
13. Exhibit 3 (Procedures to prevent the misuse of ) 13.
14. Exhibit 4 (Organizational information) 14.
15. Exhibit 5 (Code of Ethics) 15.
16. Exhibit 6 (Conflicts of interest) 16.
17. Exhibit 7 (Procedures to manage conflicts) 17.
18. Exhibit 8 (Credit Analyst Information) 18.
19. Exhibit 9 (Designated Compliance Officer) 19.
20. Exhibit 10 (List of large users of credit )20.
21. Exhibit 11 (Audited Financial Statements) 21.
22. Exhibit 12 (Revenues) 22.
23. Exhibit 13 (Analyst Compensation) 23.

C. Rule 17g-2 Recordkeeping C.

1. Paragraph (a) of Rule 17g-2 1.

a. Paragraph (a)(1) of Rule 17g-2 a.
b. Paragraph (a)(2) of Rule 17g-2 b.
c. Paragraph (a)(3) of Rule 17g-2 c.
d. Paragraph (a)(4) of Rule 17g-2 d.
e. Paragraph (a)(5) of Rule 17g-2 e.
f. Paragraph (a)(6) of Rule 17g-2 f.
g. Paragraph (a)(7) of Rule 17g-2 g.

2. Paragraph (b) of Rule 17g-2 2.

a. Paragraph (b)(1) of Rule 17g-2 a.
b. Paragraph (b)(2) of Rule 17g-2 b.
c. Paragraph (b)(3) of Rule 17g-2 c.
d. Paragraph (b)(4) of Rule 17g-2 d.
e. Paragraph (b)(5) of Rule 17g-2 e.
f. Paragraph (b)(6) of Rule 17g-2 f.
g. Paragraph (b)(7) of Rule 17g-2 g.
h. Paragraph (b)(8) of Rule 17g-2 h.
i. Paragraph (b)(9) of Rule 17g-2 i.
j. Paragraph (b)(10) of Rule 17g-2 j.

3. Paragraph (c) of Rule 17g-2 3.
4. Paragraph (d) of Rule 17g-2 4.
5. Paragraph (e) of Rule 17g-2 5.
6. Paragraph (f) of Rule 17g-2 6.
7. Non-resident NRSROs 7.

D. Rule 17g-3 Annual Financial Reports D.

1. Paragraph (a) to Rule 17g-3 1.

a. Paragraph (a)(1): Audited Financial Statements a.
b. Paragraph (a)(2): Consolidating Financial Statements b.
c. Paragraph (a)(3): Revenue Information c.
d. Paragraph (a)(4): Credit Analyst Compensation d.
e. Paragraph (a)(5): List of Large Customers e.

2. Paragraph (b) of Rule 17g-3 2.
3. Paragraph (c) of Rule 17g-3 3.

E. Rule 17g-4 Procedures to Prevent the Misuse E.

1. Paragraph (a)(1) of Rule 17g-4 1.
2. Paragraph (a)(2) of Rule 17g-4 2.
3. Paragraph (a)(3) of Rule 17g-4 3.
4. Paragraph (b) of Rule 17g-4 4.

F. Proposed Rule 17g-5 Management of Conflicts F.

1. Paragraph (a) of Rule 17g-5 1.

2. Paragraph (b) of Rule 17g-5 2.

a. Paragraph (b)(1) Rule 17g-5 a.
b. Paragraph (b)(2) of Rule 17g-5 b.
c. Paragraph (b)(3) of Rule 17g-5 c.
d. Paragraph (b)(4) of Rule 17g-5 d.
e. Paragraph (b)(5) of Rule 17g-5 e.
f. Paragraph (b)(6) of Rule 17g-5 f.
g. Paragraph (b)(7) of Rule 17g-5 g.
h. Paragraph (b)(8) of Rule 17g-5 h.
i. Paragraph (b)(9) of Rule 17g-5 i.

3. Paragraph (c) of Rule 17g-5 3.

a. Paragraph (c)(1) of Rule 17g-5 a.
b. Paragraph (c)(2) of Rule 17g-5 b.
c. Paragraph (c)(3) of Rule 17g-5 c.
d. Paragraph (c)(4) of Rule 17g-5 d.

G. Rule 17g-6 Prohibited Unfair, Coercive, G.

1. Paragraph (a)(1) of Rule 17g-6 1.
2. Paragraphs (a)(2) and (a)(3) of Rule 17g-6 2.

3. Paragraph (a)(4) of Rule 17g-6 3.

a. Structured Product Credit Rating Practices a.
b. Proposed Rule 17g-6(a)(4) b.
c. Comments on Proposed Rule 17g-6(a)(4) c.
- i. Support for a Prohibition i.
- ii. Opposition to a Prohibition ii.
d. Final Rule 17g-6(a)(4)d.
e. Enhanced Recordkeeping Requirements e.
- i. Paragraph (a)(7) of Rule 17g-2 i.
- ii. Paragraph (b)(8) of Rule 17g-2 ii.
- iii. Paragraph (b)(9) of Rule 17g-2 iii

V. PAPERWORK REDUCTION ACT V.

A. Collections of Information in the Rules A.

B. Use of the Information B.

C. Respondents C.

D. Total Annual Recordkeeping and Reporting Burden D.

1. Rule 17g-1, Form NRSRO, and Instructions for 1.
2. Rule 17g-2 2.
3. Rule 17g-3 3.
4. Rule 17g-4 4.

E. Collection of Information Is Mandatory E.

F. Confidentiality F.

G. Record Retention Period G.

H. Request for Comment H.

VI. COSTS AND BENEFITS OF THE RULES VI.

A. Benefits A.

B. Costs B.

1. Rule 17g-1, Form NRSRO and Instr. to Form NRSRO 1.
2. Rule 17g-2 2.
3. Rule 17g-3 3.
4. Rule 17g-4 4.
5. Rules 17g-5 and 17g-6 5.

VII. CONSIDERATION OF BURDEN ON COMPETITION
AND PROMOTION OF EFFICIENCY, COMPETITION, AND
CAPITAL FORMATION VII

VIII. FINAL REGULATORY FLEXIBILITY ANALYSIS VII

A. Need for and Objective of the Rules A.

B. Significant Issues Raised by Commenters B.

C. Legal Basis C.

D. Small Entities Subject to the Rule D.

E. Reporting, Recordkeeping, and Other E.

F. Duplicative, Overlapping, or Conflicting Fed Rules F.

G. Significant Alternatives G.

IX. STATUTORY AUTHORITY IX.

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Oversight of Credit Rating Agencies Registered as Nationally Recognized Statistical Rating Organizations