S&P’s steps to further manage potential conflicts of interest, strengthen the ratings process, and better serve the markets
Education: More Effectively Educating Marketplace about Credit Ratings and Rated Securities
Publish a Credit Ratings User Manual and Investor Guidelines to promote better understanding of the ratings process and the role of ratings in the financial markets. »Progress
We have broadened distribution of this data to include regulators, legislators and other market participants.
- For example, we have produced a multimedia videocast, discussing the key highlights of S&P’s most recent annual corporate default and transition study. The videocast and study were distributed free of charge on March 31 to roughly 30,000 institutional investors and other market participants.
- We are improving users’ ability to search for our criteria on our website. We are on schedule to release this enhancement by mid-year 2008.
- Released new RMBS Product Distribution Platform (available via https://www.sp.sfproducttools.com/sfdist/), which includes all of S&P’s publicly available Residential Mortgage Backed Securities models
- Launched update of CDO Interface (available via https://www.sp.cdointerface.com/CdoOnlineWeb/login.htm), which provides greater transparency through increased reporting functionality and improved access to European and Asia/Pacific deal research
We will continue to look for additional methods of broadening the distribution of our analysis and opinions and update the market on our actions.
Launch market outreach program for S&P executives to establish relationships with CIO's. Launch another outreach program to educate the market on the complex securities that S&P rates. »Progress
- We have recently begun meeting with Chief Investment Officers at top investment firms to discuss ways in which we can provide greater transparency on the complex securities we rate.
- In addition, S&P has recently expanded the production and distribution of its free podcasts and videocasts to provide broader market access to the perspectives of S&P’s analytical staff.
- We will continue to look for additional methods to promote a better understanding of the complex securities we rate.
Establish an Advisory Council with membership that includes risk managers, academics and former government officials to provide guidance on addressing complex issues and establish topics for market education. »Progress
Standard & Poor’s is part of a working group, together with other SEC-registered NRSROs who choose to participate. This group is responding to matters of regulatory concern, as appropriate, and implementing industry-wide proposals to help restore confidence in the credit rating industry.
S&P is also working with the American Securitization Forum and other trade groups and industry organizations to establish best practices for disclosure in securitizations.
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