• SEC Staff Issues Guidance on Use of Credit Ratings in Securities Offerings
  • August 4, 2010 | Authors: Mark S. Bergman; Lyudmila Y. Bondarenko; Andrew J. Foley; David S. Huntington; John C. Kennedy
  • Law Firm: Paul, Weiss, Rifkind, Wharton & Garrison LLP - New York Office
  • The Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law on July 21, 2010, contains a number of provisions that impact the regulation of credit rating agencies. Among these provisions is an immediately effective requirement that nullifies Rule 436(g) under the Securities Act of 1933. Rule 436(g) had exempted credit rating agencies from being treated as “experts” for purposes of liability under the securities laws in respect of ratings information contained in registration statements. Because of the significant impact this change will have on the use of credit ratings in registered securities offerings, the SEC staff has issued guidance for corporate issuers and no-action relief for asset-backed issuers to assist in managing the transition.