The SEC adopted new amendments last week that will remove and replace references to credit ratings from the existing exceptions in Rules 101 and 102 of Regulation M.
In conjunction with this rule, the SEC added a new records retention requirement for broker dealers with regards to the exception in Rule 101. In accordance with Regulation 17a-4, “broker-dealers would be required to preserve for a period of not less than three years, the first two years in an easily accessible place, the written probability of default determination made pursuant to proposed paragraph (c)(2)(i) of Rule 101.”
Per SEC Chair Gensler, “This adoption fulfills Congress’s wishes in the wake of the 2008 financial crisis, ensuring we don’t embed in our ruleset a reliance on credit ratings – and instead have appropriate alternative measures of creditworthiness.”
Read the full press release from the SEC here: https://www.sec.gov/news/press-release/2023-105
Find the final rule here: https://www.sec.gov/rules/final/2023/34-97657.pdf
To learn more visit, presults.com.
Contributor – Anne Harris, Head of Marketing, Presults