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MBA Asks SEC Not to Implement Separate Ratings

WASHINGTON, DC-Investors could be misled by separate ratings for structured securities under the plan the SEC is proposing.

By Erika Morphy | Updated on July 25, 2008

WASHINGTON, DC-The Mortgage Bankers Association is asking the Securities and Exchange Commission to pull back from its proposal that credit rating agencies differentiate the ratings they issue on structured products from those they issue on bonds. MBA has voiced such objections before; however it is reiterating its position on the issue in a formal comment letter it recent sent to the agency, which is now considering the matter.

In June, the SEC proposed a series of comprehensive credit rating agency reforms, which included the bifurcated rating system for structured securities but also additional measures that would increase the transparency and efficiency of the rating agencies’ decision-making processes.

The MBA supports the measures that would increase transparency and accountability in the rating process, Josh Denney, associate vice president of public policy with MBA, tells GlobeSt.com.

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