Wednesday, April 23, 2008

SIFMA credit rating agency task force

SIFMA ANNOUNCES TASK FORCE TO MAKE RECOMMENDATIONS ON THE EVOLUTION OF THE CREDIT RATING AGENCY MODEL

The Securities Industry and Financial Markets Association (SIFMA) today announced that it has formed an industry-wide, investor-led task force that will examine the credit ratings issues, taking a broad, global view.

“Ensuring an open, competitive and more transparent credit rating system will be an important step towards restoring investor confidence and trust in our markets,” said Tim Ryan, president and CEO of SIFMA. “This task force will take an integrated approach to exploring the credit rating system, including key issues such as the current use and quality of ratings, the issuer-pays model and rating agency independence. Given the global nature of the issues and the concerns voiced by regulators, SIFMA, with its worldwide financial services footprint, has a unique opportunity to be a leader in this space and serve as a catalyst for change.”

SIFMA’s goal is to formalize and advance the dialogue between its members and rating agencies that took place during the past year, through a single group that will focus on this issue. Additionally, the task force will interface with government officials, legislators, regulators, multi-lateral authorities and key credit rating agencies.

The task force will be led by Boyce Greer, president of the fixed income and asset allocation division at Fidelity, and Deborah Cunningham, chief investment officer at Federated Investors. Two dozen firms representing a cross-section of the financial services industry will offer their perspectives in addressing a full range of issues. Individuals participating on the task force will lend specific expertise in structured finance, municipals, short-term debt ratings and risk among key areas. AllianceBernstein, JP Morgan Chase, Citigroup, Vanguard and Schroders are among additional participating firms.

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