House Panel Approves Legislation to Boost Competition in Rat-ings Business
June 16, 2006
The House Financial Services Committee this week approved legislation designed to boost competition in the securities rating business, improve transparency in the ratings process and lower prices for obtaining ratings. Of particular note for the MBS and ABS markets, the “Credit Rating Agency Duopoly Relief Act,” H.R. 2990, would also prohibit the “notching” practices by the rating services. Notching – the lowering of ratings on asset-backed securities when the rating service does not rate a…