Credit Rating Agencies Reform Resource Center

A credit rating agency assigns credit ratings for issuers of debt, as well as the debt instruments themselves (including bonds, preferred stock, and commercial paper). Mutual funds employ credit ratings in a variety of ways—to help make investment decisions, to define investment strategies, to communicate with their shareholders about credit risk, and to inform the process for valuing securities.

The need for reliable and credible ratings has grown along with the complexity of the capital markets. Meanwhile, the financial crisis of 2008–2009 made clear the serious flaws in the ratings process and the urgency of reforms such as better disclosure, increased accountability, and improved rating presentations.

In October 2009, and again in December 2009, the Securities and Exchange Commission (SEC) proposed amendments that would impose a series of new requirements on registered rating agencies to improve disclosure about credit ratings and the ratings process and address conflicts of interest between rated issuers and the rating agencies. The SEC also solicited comments regarding measures to enhance liability for rating agencies.

With the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress decided to codify many of the measures that were a part of the SEC proposals as well as require additional oversight requirements that were not a part of the SEC proposals.

This resource center provides information about reform efforts for the improvement in the way credit rating agencies function. This page will be updated as events unfold.