The SEC has stated that it will not enforce part of the Dodd-Frank Act that requires asset-back security issuers to post credit ratings on their marketing collateral, at least for the time being.
""Given the current state of uncertainty in the asset- backed securities market and the benefits to investor protection resulting from Securities Act registration, the Division is extending the relief,” the SEC said."
Under Dodd-Frank, ratings firms could be held liable for their ratings. Is it really that unrealistic to expect that firms, which create ratings that billions (if not trillions) of investment dollars hinge upon, have some culpability when it comes to the ratings they produce? I would fully expect a sea change in the way the ratings agencies operate, but this regulation isn't exactly a surprise. c'mon moodys!
"The Dodd-Frank law, signed by President Barack Obama in July, subjects ratings companies to so-called expert liability, meaning they would face the same legal risks as accountants and other parties that participate in bond sales."
http://www.bloomberg.com/news/2010-11-23/sec-allows-asset-backed-issuers-to-omit-ratings-required-by-dodd-frank-act.html
No comments:
Post a Comment