SIA Submits Comments to the SEC on Rating Agencies and the Use of Credit Ratings under Federal Securities Laws

The Securities Industry Association (SIA)* provides comments to the Securities Exchange Commission (SEC) on rating agencies and the use of credit ratings under federal securities laws, Release Nos. 33-8236, 34-47972, IC-26066; File No. S7-12-03. SIA notes the use of a credit ratings approach for the determination of capital adequacy is a primary thrust of the New Basel Capital Accord. SIA cautions against any steps by theSEC that would have the effect of abandoning the use of credit ratings as an element of the Net Capital Rule. Less sophisticated and/or smaller broker-dealers would be particularly adversely impacted by the absence of publicly available ratings.

*SIFMA is the product of a merger between the Securities Industry Association (SIA) and The Bond Merger Association (TBMA) in 2006.