SEC Grants Temporary Exemption to Rating Agency from Conflicts of Interest Rule

The SEC granted a temporary, limited and conditional exemption to a nationally recognized statistical bond rating agency from Securities Exchange Act Rule 17g-5(c)(1)("Conflicts of Interest").

The rule to which the exemption applies prohibits a nationally recognized statistical rating organization ("NRSRO") from issuing a credit rating where the issuer soliciting the rating was the source of 10% or more of the total net revenue of the NRSRO during the most recently ended fiscal year.

The exemptive relief will give the NRSRO the opportunity to continue to diversify its business beyond commercial mortgage-backed securities ratings and into other sectors of capital markets.