SEC Extends Rule Keeping Credit Raters Honest
Published Date: 2/26/2025
Notice
Summary
The SEC is asking to keep Rule 17g-4 going, which makes sure credit rating agencies keep their info safe and don’t cheat by trading on secret info. This affects 10 big credit rating companies who spend about 10 hours a year updating and following these rules. You’ve got until March 28, 2025, to share your thoughts, but no new costs or big changes are coming.
Analyzed Economic Effects
2 provisions identified: 1 benefits, 1 costs, 0 mixed.
Credit agencies must prevent insider trading
Rule 17g-4 requires each nationally recognized statistical rating organization (NRSRO) to have written policies and procedures to prevent: (1) inappropriate dissemination of material nonpublic information, (2) persons within the NRSRO from trading or otherwise benefiting on material nonpublic information, and (3) inappropriate disclosure of a pending credit rating action. The rule is an ongoing SEC requirement that applies to currently registered NRSROs.
NRSROs face 100 annual compliance hours
The SEC estimates there are 10 registered NRSROs and that each will spend about 10 hours per year reviewing, updating if needed, and enforcing the policies required by Rule 17g-4, for an industry-wide annual burden of approximately 100 hours. The notice states this is an extension of the existing paperwork collection and indicates no new costs or major changes are expected.
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