SEC May Report Soon on Inherent Conflicts In Issuer-Pay Credit Ratings Model
November 2, 2012
The Securities and Exchange Commissions overdue Franken amendment study will be out soon and may include alternatives to the issuer-pay ratings model, the agencys chief, Mary Schapiro, said last week at the annual meeting of the Securities Industry and Financial Markets Association. The issuer-pay model has inherent conflicts in it, Schapiro said, referring to the prevailing system in which securities issuers generally pay to obtain ratings from the credit rating services. The SEC head provided no additional specifics regarding the alternatives that might be featured in the agencys pending report. The Franken amendment study is...