SEC Grants Exemption to Japanese Credit Rating Agency

The SEC granted a temporary conditional exemption to a Japanese credit rating agency from certain provisions under Exchange Act Section 15E (Registration of Nationally Recognized Statistical Rating Organizations)("NRSRO"). The credit rating agency sought relief from rule duplications and potential conflicts with its' compliance obligations under Japanese law. The conditional exemption was granted subject to the rating agency conforming to policies established in paragraph (t) of Section 15E related to corporate governance, organization, and management of conflicts of interest.

Further, the conditional exemption is subject to the credit agency: (i) maintaining a Supervisory Committee pursuant to Japanese law; (ii) requiring the Supervisory Committee to fulfill all of the duties mandated by Exchange Act Section 15E(t)(3); (iii) promptly notifying SEC staff of any changes to the requirements of Japanese law and to its internal Supervisory Committee Rules and providing a copy of the updated Committee Rules to the SEC staff upon request; (iv) requiring that at least one of the independent members of the Supervisory Committee be a user of ratings; (v) requiring that at least half of the Supervisory Committee, but no fewer than two members, be independent of the NRSRO, as defined in Exchange Act Section 15E(t)(2)(B); and (vi) requiring that the independent members of the Supervisory Committee serve for a total term of no more than five years.

See: SEC Order Granting Temporary Conditional Exemption for Japanese Credit Rating Agency.