Bethesda, MD. (Jan. 28, 2003) -- The Securities and Exchange Commission is heeding the findings of a recent Association for Financial Professionals survey by agreeing to further examine potential barriers to its official recognition of credit rating agencies, as well as its ongoing oversight of them.
The SEC also agreed to propose rules within 60 days and solicit public comment. The SEC's action was disclosed in a report delivered to congress last Friday. The AFP waited over two months for the SEC’s decision.
The AFP's November 2002 ratings agency survey found that nearly two-thirds of corporate financial professionals believe the SEC should clarify the procedures it uses for recognizing rating agencies. Almost three-quarters of those surveyed believe the SEC should periodically review the rating agencies it recognizes. The survey also revealed that 48 percent of corporate practitioners believe additional choices for rating agencies would increase accuracy when assessing corporate credit risk.
Also of note in the survey, more than a quarter of practitioners working for companies that have experienced a downgrade said it took more than six months for adverse changes to be reflected in their ratings. Most respondents in the survey do not believe changes in their company's finances are promptly reflected in the ratings, reporting that it typically takes up to six months for a ratings downgrade and longer for an upgrade.
Complete results of the 22-page survey can be found at www.AFPonline.org .
-- Electronic Accountant Newswire staff
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