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Capital Markets
PARIS-The International Organization of securities Commissions (IOSCO) May 28 published changes to its code of conduct for credit-rating agencies (CRA) that it said are aimed at addressing questions raised by securities regulators and market observers about the integrity and quality of the ratings process at CRAs.
IOSCO, which is based in Madrid, said it introduced the changes to its code following a public consultation process involving regulators, credit-rating agencies, and financial market stakeholders. It released the report containing the changes, The Role of Credit Rating Agencies in Structured Finance Markets, at its 33rd Annual Conference held in Paris, May 26-29, and sponsored by the Autorité des marchés financiers of France, France's stock market authority.
IOSCO said the changes are aimed at addressing issues that arose about activities of CRAs in the market for structured finance products. These products, backed by U.S. subprime retail mortgages, have figured prominently in the recent global market turmoil. The quality of the credit ratings of these products-and the CRA policies and methodologies that resulted in these ratings-have been questioned by many securities regulators and market observers, IOSCO said.