Proposed Amendments to the Securities Act, the Exchange Act, & the Investment Advisers Act

The Credit Rating Agency Task Force of SIFMA provides comments to the Securities and Exchange Commission (SEC) on proposed amendments to various rules and forms under the Securities Act of 1933 (Securities Act), the Securities Exchange Act of 1934 (Exchange Act), and the Investment Company Act of 1940 (Investment Act).  The proposals would affect references to ratings of Nationally Recognized Statistical Rating Organizations (NRSROs), References to Ratings of Nationally Recognized Statistical Rating Organizations; Release No. 34-58070; File No. S7-17-08; Security Ratings; Release Nos. 33-8940, 34-58071; File No. S7-18-08; and References to Ratings of Nationally Recognized Statistical Rating Organizations; Release Nos. IC-28327, IA-2751; File No. S7-19-08.  SIFMA has not found that the possibility of undue reliance on credit ratings supports the deletion of references to, and use of, credit ratings in regulations.  SIFMA notes the incorporation of credit ratings in securities regulations in many cases provides an appropriate independent minimum threshold, and is an important data point that should be retained as part of an investor’s overall credit analysis. SIFMA believes that the appropriate degree of use by market participants of ratings is less of a regulatory issue, and more one of best practices within the marketplace.