29 September 2003

IOSCO report on the activities of credit rating agencies

The International Organization of Securities Commissions (IOSCO) released a report on the activities of credit rating agencies (CRAs). The IOSCO Technical Committee formed a Task Force to examine certain key issues regarding the role CRAs play in securities markets, as they can play an important role in many domestic and crossborder transactions.

In particular, the Technical Committee charged the Task Force with assessing:

Whether CRAs disclose information about their decisions and rating criteria and whether the amount and quality of the information disclosed is sufficient for making investment decisions;

How, when and to whom CRAs disseminate their rating decisions, and how CRAs protect against the misuse and unauthorized disclosure of nonpublic information;

The types of conflicts of interest CRAs face and how these conflicts of interest can be prevented or managed;

The types of regulatory oversight to which CRAs are subject, the effectiveness of this oversight, and the types of qualifications regulators require of CRAs; and,

Whether there are barriers in the regulatory framework to entry into the credit rating business, whether such barriers have an impact on the quality of CRA ratings, and whether the barriers can be reduced.

IOSCO document

© IOSCO