Legal Spotlight
In the second of a two-part article, Laurence Pettit, partner at Baker & McKenzie, discusses recent credit rating agency reforms and asks whether they go far enough to restore confidence in what many people regard as a flawed system
The Enron and WorldCom debacles highlighted a need for closer oversight of credit rating agencies. The Sarbanes-Oxley Act gave the US authorities the mandate to pass appropriate legislation, and in 2006 President Bush signed into law the Credit Rating Agency Reform Act, which laid out explicit requirements on becoming an NRSRO, or 'nationally recognised statistical rating organisation'.
Under the new law, a prospective NRSRO has to have been in business for at least three years prior to its
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