HR 6230

110th CONGRESS
2d Session

H. R. 6230

To amend the Securities Exchange Act of 1934 to require nationally registered statistical rating organizations to provide additional disclosures with respect to the rating of certain structured securities, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

June 10, 2008

Mr. MCHENRY introduced the following bill; which was referred to the Committee on Financial Services

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A BILL

To amend the Securities Exchange Act of 1934 to require nationally registered statistical rating organizations to provide additional disclosures with respect to the rating of certain structured securities, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Credit Rating Agency Transparency and Disclosure Act'.

SEC. 2. ADDITIONAL RATINGS BASIS DISCLOSURES FOR STRUCTURED SECURITIES.

Section 15E(c) of the Securities Exchange Act of 1934 (15 U.S.C. 78o-7(c)) is amended by adding at the end the following new paragraphs:

`(3) DISCLOSURES WITH RESPECT TO STRUCTURED SECURITIES-

`(A) REGULATIONS REQUIRED- The rules and regulations prescribed by the Commission pursuant to this title with respect to nationally recognized statistical rating organizations shall, with respect to the procedures and methodologies by which any nationally recognized statistical rating organization determines credit ratings for structured securities--

`(i) specify the information required to be disclosed to such rating organizations by the originators, issuers, and underwriters of such structured securities on the collateral underlying such structured securities; and

`(ii) establish and implement procedures to collect and disclose information about the processes used by such originators, issuers, and underwriters to assess the accuracy and integrity of their data and fraud detection.

`(B) DEFINITION- For purposes of this paragraph, the Commission shall, by rule or regulation, define the term `structured securities' as appropriate in the public interest and for the protection of investors.

`(4) HISTORICAL DEFAULT RATE DISCLOSURES- The rules and regulations prescribed by the Commission pursuant to this title with respect to nationally recognized statistical rating organizations shall require each nationally recognized statistical rating organization to establish and maintain, on a publicly accessible Internet site, a facility to disclose, in a central database, the historical default rates of all classes of financial products rated by such organization.'.

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