By year end 2012, the US Securities and Exchange Commission is expected to adopt final rules under Section 939F of the Dodd-Frank Act—commonly known as the “Franken Amendment”—and publish its study on establishing an alternative system for allocating rating assignments for structured finance products. The Franken Amendment seeks to create a public utility or self-regulatory organization that would rotate credit-rating agencies among firms issuing securities.
Meanwhile, the European Union’s pending reform of credit-rating agency regulation, known as CRA 3, would also mandate rotation of rating agencies for certain structured finance products, prohibit references to ratings for regulatory purposes in EU law, require increased disclosure by issuers and rating agencies, provide for regulatory review of rating methodologies and make rating agencies subject to civil liability for mistakes in methodology or other infringements. These measures, also due to be finalized this year, could have significant implications for Europe’s credit markets.
On Thursday, July 26, 2012, please join Chicago-based partner Paul Forrester and London-based partner Kevin Hawken as they discuss the proposed credit rating rules, what the developments mean for the structured finance industry, and why the proposed rules may do more harm than good.
Mayer Brown's Global Financial Markets Initiative helps clients deal with the legal and business challenges resulting from the ongoing turbulence in worldwide financial markets. By mobilizing the firm's global resources from multiple practices and offices, the Initiative provides clients with knowledgeable and timely counsel on a broad spectrum of their legal needs.