15 U.S.C. § 78o–8 — Universal ratings symbols
submitted 16 years ago by Pub. L. 111-203 to r/title-15-COMMERCE-AND-TRADE · 152 words · no verdicts yet
This law tells the SEC to make rules for credit rating agencies. Each agency must judge how likely an issuer is to default. It must clearly explain what its rating symbols mean and use them consistently.
(a) Rulemaking. The SEC must require, by rule, that every NRSRO adopt written policies and procedures that do three things. First, the policies must make the NRSRO assess how likely it is that an issuer* of a security* or money market instrument will default, fail to pay on time, or otherwise not pay investors what the terms of the security promise. Second, the policies must make the NRSRO clearly define and disclose what each symbol it uses to show a credit rating* actually means. Third, the policies must make the NRSRO use each symbol the same way across every type of security or money market instrument it applies that symbol to.
(b) Rule of construction. Nothing in this section stops an NRSRO from using a different set of symbols for different types of securities or money market instruments — it just has to be clear and consistent about what each set means.
The Commission* shall require, by rule, each nationally recognized statistical rating organization* to establish, maintain, and enforce written policies and procedures that—
assess the probability that an issuer* of a security* or money market instrument will default, fail to make timely payments, or otherwise not make payments to investors in accordance with the terms of the security or money market instrument;
clearly define and disclose the meaning of any symbol used by the nationally recognized statistical rating organization to denote a credit rating*; and
apply any symbol described in paragraph (2) in a manner that is consistent for all types of securities and money market instruments for which the symbol is used.
Nothing in this section shall prohibit a nationally recognized statistical rating organization from using distinct sets of symbols to denote credit ratings for different types of securities or money market instruments.
Source credit: (Pub. L. 111–203, title IX, § 938, July 21, 2010, 124 Stat. 1885.)
- 2010Enacted · Pub. L. 111-203 · 124 Stat. 1885
A history note hasn’t been published yet. The record shows enactment by Pub. L. 111-203 on 2010-07-21.
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