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SEC grants six-month reprieve on ratings for asset-backed debt
ISSUERS?of asset-backed securities in the US have been given a six-month grace period that allows them to submit regulatory filings without credit ratings, amid fears they are unable to comply with President Obama’s tough financial reforms.
Borrowers are finding it impossible to get rating agencies to allow them to use their ratings in public filings, after the new legislation opened the door to litigation against the likes of Moody’s, Standard & Poor’s and Fitch if the securities turn sour.
Marion Cross, the director of the SEC’s division of corporate finance said the new regulations will “provide issuers, rating agencies and other market participants a transition period in order to implement changes to comply”.