Say new rules will dampen incentive to buy their product over larger agencies'
A Securities and Exchange Commission plan to spur competition among credit rating agencies after the subprime debacle is drawing fire from industry participants who say it may help bigger firms at the expense of smaller ones.
The proposal, unveiled June 11, would impose disclosure requirements on rating agencies hired to grade structured assets such as mortgage-backed securities and collateralized debt obligations that were at the heart of the housing credit crunch.
Firms would have to disclose details about the assets underlying the securities and give competitors a chance to offer unsolicited ratings. The rating agencies would also have to make their grades public so investors could compare each firm’s performance.
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