SEC Proposes Amendments to Remove References to Credit Ratings from Regulation M

The Securities and Exchange Commission today voted to propose changes that would remove the references to credit rating agencies from existing exceptions provided in Rule 101 and Rule 102 of Regulation M, a set of rules designed to preserve market integrity by prohibiting activities that could artificially influence the market for an offered security. "In Section 939A of the Dodd-Frank Act of 2010, Congress directed federal agencies, including the SEC, ‘to remove any reference to or requirement of reliance on credit ratings’ from our rules and to substitute an appropriate standard for credit-worthiness," said SEC Chair Gary Gensler. "The SEC has completed much of this work, and the only remaining references to credit ratings are in Rules 101 and 102 of Reg M.