Credit Rating Agency Regulatory Reform: A Side-by-Side Comparison of H.R. 2990 and S. 3850

CRS Report for Congress
Credit Rating Agency Regulatory Reform:
A Side-by-Side Comparison of
H.R. 2990 and S. 3850
September 19, 2006
Gary Shorter
Specialist in Business and Government Relations
Government and Finance Division

Congressional Research Service ˜ The Library of Congress

Credit Rating Agency Regulatory Reform:
A Side-by-Side Comparison of
H.R. 2990 and S. 3850
Summary
Credit rating agencies assess the probability that a securities issuer will default
by failing to repay principal and interest on the security. Globally, there are about
130 agencies, but Moody’s and Standard & Poor’s (S&P) combine for about 80% of
overall market share, with Fitch accounting for about a 15% share.
In 1975, the Securities and Exchange Commission (SEC) issued the Net Capital
Rule, which set new capital requirements for broker-dealers and required them to
take a larger discount on their bond holdings deemed to be below investment grade
by a rating agency that it recognized as a nationally recognized statistical rating
organization (NRSRO). Since then, a growing number of federal, state, and foreign
government statutes and regulations have adopted NRSRO ratings as reference points
or triggers. However, there is no statutory definition of an NRSRO. When a rating
agency requests NRSRO status, it applies to the SEC Division of Market Regulation
for NRSRO designation, a decision-making process that is often both uncertain and
of an indefinite time span.
Currently, five rating agencies have NRSRO designation: Fitch; Moody’s;
S&P; the A.M. Best Company, which rates insurance and reinsurance firms; and the
Dominion Bond Rating Service Limited, a Canadian-based firm.
Like other providers of financial market analysis, the major NRSROs play a
critical role as financial sentries or gatekeepers whose assessments can help warn
against corporate meltdowns. Their record, however, is imperfect. For example, in
2001, Moody’s, S&P, and Fitch issued favorable credit ratings of WorldCom bonds
three months before the company declared bankruptcy. Additional concerns exist
over the way in which the NRSRO process may impede non-NRSROs’ access to
more profitable segments of the rating industry.
In the 109^th Congress, two legislative responses to the perceived shortcomings
of the NRSRO protocol are H.R. 2990 (Fitzpatrick), the Credit Rating Agency
Duopoly Relief Act of 2006, which passed the House on July 12, 2006, and S. 3850
(Shelby), the Credit Rating Agency Reform Act of 2006, which was voted out of the
Senate Banking and Urban Affairs Committee on August 2, 2006. Both bills would
scrap the current NRSRO designation process and instead would allow entities with
at least three consecutive years as rating agencies to register with the SEC as
NRSROs. S. 3850 would permit the SEC to reject a rating agency’s application for
NRSRO registration if it determined that the rater lacked sufficient financial and
managerial resources, whereas H.R. 2990 would impose no such test. Each bill, if
enacted, would be likely to significantly expand the number of NRSROs.
This report provides a side-by-side comparison of the bills’ major provisions;
it will be updated as events dictate.

Contents
In troduction ......................................................1
List of Tables
Table 1. A Comparison of Major Provisions of H.R. 2990 and S. 3850.......3

Credit Rating Agency Regulatory Reform:
A Side-by-Side Comparison of
H.R. 2990 and S. 3850
Introduction
Credit rating agencies assess the probability that a securities issuer will default
by failing to repay principal and interest on the security. Two rating agencies
dominate the rating industry — Moody’s and Standard & Poor’s (S&P) who combine
for about 80% of the overall market share. Fitch Ratings has about a 15% share.
Globally, there are about 130 agencies.
In 1975, the Securities and Exchange Commission (SEC) issued the Net Capital
Rule, which set new capital requirements for broker-dealers and required them to
take a larger discount on their bond holdings deemed to be below investment grade
by a rating agency that it recognized as a nationally recognized statistical rating
organization (NRSRO). Since then, a growing number of federal, state, and foreign
government statutes and regulations have adopted NRSRO ratings as reference points
or triggers. But there is no statutory definition of an NRSRO. When a rating agency
requests NRSRO status, it applies to the SEC Division of Market Regulation for
NRSRO designation. And through what is known as the no-action letter process,¹ the
division can take an indefinite amount of time to determine whether to grant the
designation, a decision that is significantly based on whether the applicant is a
nationally recognized issuer of credible ratings.
Currently, five rating agencies have NRSRO designations: Fitch; Moody’s;
S&P; the A.M. Best Company, which rates insurance and reinsurance firms and
received NRSRO status in 2005; and the Dominion Bond Rating Service Limited, a
Canadian-based firm that was granted NRSRO status in 2003.
In addition to other sources of financial market analysis like securities analysts,
the major NRSROs also play a critical role as financial sentries or gatekeepers whose
assessments can help warn against corporate meltdowns. Their record, however, is
imperfect. In 2001, Moody’s, S&P, and Fitch issued favorable credit ratings of
WorldCom bonds three months before the company declared bankruptcy. Moody’s
and S&P provided favorable bond ratings for Enron corporate bonds just before the
firm’s bankruptcy. The collapse of these firms eventually cost investors billions of

¹ A no-action letter is an SEC communication stipulating that the agency does not object to
a course of action proposed by a registrant. They are generally issued after an applicant has
made a request.

dollars and provoked widespread criticism of the agencies both in and out of
Congress.
These concerns, to which the NRSROs respond that they were themselves the
victims of corporate deceit, exist alongside criticism that the NRSRO selection
process is an anticompetitive mechanism that impedes non-NRSROs’ access to the
more profitable segments of the rating industry.
The congressional response to the perceived problems surrounding the NRSRO
process and its potentially undesirable consequences has led to the introduction of
two bills in the 109^th Congress. H.R. 2990 (Fitzpatrick), the Credit Rating Agency
Duopoly Relief Act of 2006, passed the House on July 12, 2006, in a vote closely
divided along partisan lines. Soon afterwards, on August 2, S. 3850 (Shelby), the
Credit Rating Agency Reform Act of 2006, was voted out of the Senate Banking and
Urban Affairs Committee with significant bipartisan support.
Both bills would scrap the SEC’s current no-action-letter-based NRSRO
designation process with its central focus on whether an agency is nationally
recognized as an issuer of credible ratings, and with its indefinite decision making
time frames. Both would amend the Securities Exchange Act of 1934 to allow
interested entities with at least three consecutive years as rating agencies to register
with the SEC as NRSROs, which would involve the submission of performance
measurement statistics, a description of their rating methodology, details of ethics
policies, and disclosure of conflicts of interest. Under both bills, once the SEC
received a credit agency’s application to register as an NRSRO, it would have up to
120 days — with the possibility of an extension if deemed necessary — to determine
whether to deny or grant the registration.
S. 3850 would allow the SEC to reject a rating agency’s application for NRSRO
registration if it determined the applicant lacked sufficient financial and managerial
resources. H.R. 2990 has no such requirement.
S. 3850 would require NRSRO applicants to provide written certifications from
at least 10 of their institutional customers to the SEC. Applicants would also have
to provide a list of their 20 largest issuers and subscribers by the amount of net
revenues received in the previous year. Neither provision is part of H.R. 2990.
S. 3850 would also direct the SEC to issue rules on NRSRO conflicts of interest
and the misuse of non-public information conflicts of interest, provisions that are
absent from H.R. 2990.
Either bill, if enacted, would be likely to significantly expand the number of
NRSROs from the current five.
This report compares the major provisions of the two legislative proposals. Key
differences between the two bills have been italicized.

Table 1. A Comparison of Major Provisions of
H.R. 2990 and S. 3850
^Provi^sⁱ^on^H.R^.²⁹⁹⁰^S^.³⁸⁵⁰
^C^e^s^s^a^ti^on^{of th}^{e S}^E^C^’^s^W^ithⁱⁿ³⁰^d^a^y^s^af^ter^th^e^U^{pon a des}ⁱ^gnat^{ed ef}^f^ectⁱ^v^e
^{current No-Action L}^e^tter-^legⁱ^slatioⁿ^’^{s en}^actm^eⁿ^t^{, th}^e^d^a^t^{e, a}ⁿ^en^{tity th}^a^t^p^r^evio^u^s^ly
^ba^{sed NRSRO}^desigⁿ^a^t^ioⁿ^SEC^s^h^{all ceas}^{e to des}ⁱ^gⁿ^a^te^r^e^lⁱ^e^{d on t}^h^{e SEC}^’^s^no-actⁱ^oⁿ
^proces^s^pers^on^s^an^{d com}^p^an^ies^as^{letter fo}^{r its NRS}^R^{O sta}^t^u^s
^NR^SR^Os^as^{it cu}^rren^tly^m^a^{y cont}ⁱ^{nue t}^o^us^{e t}^h^e
^uⁿ^d^{er ru}^l^e^15c3-^{1 of}^t^h^e^d^e^sigⁿ^a^tioⁿ^{if it h}^a^s^filed^aⁿ
^ag^en^cy^’^s^ru^les^{(17 C}^F^R^applⁱ^c^atⁱ^{on f}^o^r^N^R^SRO
^240.15c3-^{1). In}^addition^,^th^e^r^e^gi^s^t^r^a^tⁱ^{on t}^hat^has^been
^SEC^’^s^cu^rren^{t n}^o^-^action^appr^{oved by t}^h^{e SEC}^.
^proces^s^f^o^{r N}^R^S^R^O⁽^S^ectioⁿ⁴⁾
^d^e^si^gna^tⁱ^o^{n w}^o^ul^d^b^e^voⁱ^d^e^d^.
⁽^S^ectioⁿ⁴⁾
^{Defining a credit rating}^A^{credit ag}^en^cy^is^defⁱⁿ^e^{d as}^A^{credit ag}^en^cy^is^defⁱⁿ^e^{d as}
^agen^c^y^an^en^tity^th^{at is en}^g^a^g^e^dⁱⁿ^an^en^tity^th^{at is en}^g^a^g^e^dⁱⁿ
^the^b^u^sine^{ss o}^f^{issuing c}^r^e^d^it^the^b^u^sine^{ss o}^f^{issuing c}^r^e^d^it
^r^a^tin^g^s^oⁿ^th^{e I}ⁿ^terⁿ^{et o}^r^r^a^tin^g^s^oⁿ^th^{e I}ⁿ^terⁿ^{et o}^r
^t^h^r^o^{ugh a}ⁿ^o^t^he^r^r^e^a^dⁱ^l^y^t^h^r^o^{ugh a}ⁿ^o^t^he^r^r^e^a^dⁱ^l^y
^acces^sⁱ^{ble m}^ean^s^,^f^o^{r f}^r^{ee or}^acces^sⁱ^{ble m}^ean^s^,^f^o^{r f}^r^{ee or}
^f^o^{r a reas}^on^{able f}^{ee th}^at^f^o^{r a reas}^on^{able f}^{ee th}^at
^em^p^l^o^y^{s eith}^er^{a q}^u^an^titativ^e^a^em^p^l^o^y^{s eith}^er^{a q}^u^an^titativ^e
^o^r^q^u^alitativ^e^m^odel^,^{or bot}^h^,^o^r^q^u^alitativ^{e m}^o^d^e^{l; o}^r^b^o^t^h^,
^an^{d receiv}^e^s^f^ees^f^r^om^eith^er^an^{d receiv}^e^s^f^ees^f^r^om^eith^er
^issue^r^s,^inve^sto^r^s,^o^r^o^t^he^r^issue^r^s,^inve^sto^r^s,^o^r^o^t^he^r
^m^a^r^k^{et p}^a^r^ticip^an^ts.^m^a^r^k^{et p}^a^r^ticip^an^ts.
⁽^S^ectioⁿ³⁾⁽^S^ectioⁿ³⁾
^{Credit rating agency}^T^o^regⁱ^s^t^{er as}^an^NR^SR^O^T^o^regⁱ^s^t^{er as}^an^NR^SR^O
^ex^{perience needed to}^w^ith^th^{e SEC, a cr}^ed^{it r}^a^tin^g^w^ith^th^{e SEC}^:^{(1) a credit}
^qua^lif^y^f^o^{r reg}^ist^r^a^t^io^{n a}^s^ag^en^cy^m^u^s^t^h^a^v^e^beenⁱⁿ^ratin^g^ag^en^cy^m^u^s^t^h^a^v^e^been
^aⁿ^NRSRO^b^u^sine^{ss fo}^r^a^t^le^a^s^{t thr}^e^eⁱⁿ^b^u^sin^e^{ss f}^o^r^{at least th}^r^e^e
^con^s^ecu^tiv^{e y}^ears^.^con^s^ecu^tiv^{e y}^ears^;^an^{d (2)}
⁽^S^ectioⁿ³⁾^h^a^{ve received}^written
^certifica^tioⁿ^s^fro^m^a^t^lea^s^{t 1}⁰
^{“qualified ins}^titutional
^b^u^{yers” (}^a^{s d}^e^fin^edⁱⁿ^sectioⁿ
^{230.144 (}^a⁾^of^{title 17, C}^ode
^of^Feder^a^l^Regul^atⁱ^ons⁾^.
⁽^S^ectioⁿ³⁾

^Provi^sⁱ^on^H.R^.²⁹⁹⁰^S^.³⁸⁵⁰
^W^h^{at th}^{e S}^E^Cⁱ^s^au^th^ori^zed^T^h^{e SEC}^is^au^th^{orized to}^T^h^{e SEC}^is^au^th^{orized to}
^{to require of credit rating}^requ^{ire a credit ratin}^g^ag^en^cy^requ^{ire a credit ratin}^g^ag^en^cy
^agencies^interes^{ted in}^th^{at elects}^{to be reg}ⁱ^s^t^{ered as}^th^{at elects}^{to be reg}ⁱ^s^t^{ered as}
^regis^{tering as}^NRSROs^an^{NRSRO to}^f^ile^an^{NRSRO to}^f^ile
ⁱⁿ^f^o^r^m^atioⁿ^th^{at m}^a^yⁱⁿ^clu^d^eⁱⁿ^f^o^r^m^atioⁿ^th^{at m}^a^yⁱⁿ^clu^d^e
⁽¹⁾^an^y^coⁿ^f^{licts o}^fⁱⁿ^ter^e^st⁽¹⁾^an^y^coⁿ^f^{licts o}^fⁱⁿ^ter^e^st
^r^e^latin^g^to^th^{e issu}^an^{ce o}^f^r^e^latin^g^to^th^{e issu}^an^{ce o}^f
^cr^ed^{it r}^a^tin^g^s^{; (}²⁾^th^e^cr^ed^{it r}^a^tin^g^s^{; (}²⁾^th^e
^procedu^r^es^an^d^procedu^r^es^an^d
^m^e^t^h^odol^ogⁱ^e^s^u^s^{ed i}ⁿ^m^e^t^h^odol^ogⁱ^e^s^u^s^{ed i}ⁿ
^d^e^ter^mⁱⁿⁱⁿ^g^cr^ed^{it r}^a^tin^g^s^{; (}³⁾^d^e^ter^mⁱⁿⁱⁿ^g^cr^ed^{it r}^a^tin^g^s^{; (}³⁾
^th^eir^cr^ed^{it r}^a^tin^g^s^th^eir^cr^ed^{it r}^a^tin^g^s
^perf^orm^aⁿ^{ce m}^eas^u^r^em^en^t^perf^orm^aⁿ^{ce m}^eas^u^r^em^en^t
^{statistics o}^v^er^sh^o^r^t-^ter^m^,^{statistics o}^v^er^sh^o^r^t-^ter^m^,
^mⁱ^d^-^ter^m^{, an}^d^loⁿ^g^-^ter^m^mⁱ^d^-^ter^m^{, an}^d^loⁿ^g^-^ter^m
^peri^ods^;^{(4) pol}ⁱ^cⁱ^e^s^or^peri^ods^;^{(4) pol}ⁱ^cⁱ^e^s^or
^procedu^r^es^adopt^{ed an}^d^procedu^r^es^adopt^{ed an}^d
^im^p^l^em^en^ted^to^p^r^ev^en^{t th}^e^im^p^l^em^en^ted^to^p^r^ev^en^{t th}^e
^mⁱ^suse^o^f^m^a^te^rⁱ^a^l^,^mⁱ^suse^o^f^m^a^te^rⁱ^a^l^,
ⁿ^oⁿ^-^p^u^b^{lic in}^f^o^r^m^atioⁿ^;^an^dⁿ^oⁿ^-^p^u^b^{lic in}^f^o^r^m^atioⁿ^;⁽⁵⁾
⁽⁵⁾^{its o}^r^g^aⁿⁱ^zatioⁿ^a^l^{its o}^r^g^aⁿⁱ^zatioⁿ^a^{l str}^u^ctu^r^e;
^s^t^ru^ctu^r^{e. (Section}⁴⁾⁽⁶⁾^a^coⁿ^fid^en^tia^{l list o}^f^th^e
²⁰^la^rg^e^s^{t issu}^e^{rs a}ⁿ^d
^s^ubs^crⁱ^b^er^s^{by t}^h^{e am}^ount^of
^{net r}^evenues^r^{eceived in the}
^fisca^{l yea}^{r p}^r^io^{r to}^th^e
^applⁱ^c^atⁱ^{on dat}^{e; and (}⁷⁾
^written^certifica^tioⁿ^s^fro^m^a^t
^lea^s^{t 1}⁰^“q^u^a^lified
^ins^{titutional buyer}^s^”^w^h^o
^{have us}^{ed t}^h^{e appl}ⁱ^c^ant^’s
^r^a^tⁱ^ngs^.⁽^S^ectioⁿ⁴⁾
^T^h^{e SE}^C’s^review^{of an}^W^ithⁱⁿ⁹⁰^d^a^y^s^af^ter^an^W^ithⁱⁿ⁹⁰^d^a^y^s^af^ter^an
^{NRSRO a}^pplica^t^ioⁿ^ap^p^lican^{t h}^a^{s f}^iled^f^o^r^ap^p^lican^{t h}^a^{s f}^iled^f^o^r
^r^e^gⁱ^str^a^tioⁿ^,^th^{e SEC sh}^all^r^e^gⁱ^str^a^tioⁿ^,^th^{e SEC sh}^all
^eith^{er g}^r^an^{t NR}^SR^O^eith^{er g}^r^an^{t NR}^SR^O
^r^e^gi^st^r^a^tⁱ^o^{n o}^r^b^e^giⁿ^r^e^gi^st^r^a^tⁱ^o^{n o}^r^b^e^giⁿ
^proceedin^g^s^{to determ}ⁱⁿ^e^proceedin^g^s^{to determ}ⁱⁿ^e
^w^h^e^t^he^r^r^e^gi^st^r^a^tⁱ^o^{n sho}^u^l^d^w^h^e^t^he^r^r^e^gi^st^r^a^tⁱ^o^{n sho}^u^l^d
^{be den}ⁱ^{ed. T}^h^{e proceedin}^g^s^{be den}ⁱ^{ed. T}^h^{e proceedin}^g^s
^s^h^al^l^en^{d w}ⁱ^t^hⁱⁿ^{120 day}^s^s^h^al^l^en^{d w}ⁱ^t^hⁱⁿ^{120 day}^s
^f^r^o^m^th^{e d}^a^{te th}^{at th}^e^f^r^o^m^th^{e d}^a^{te th}^{at th}^e
^ap^p^licatioⁿ^w^a^{s f}^u^rⁿ^ish^e^d^an^d^application^w^a^s^receiv^e^{d an}^d
^sh^{all in}^v^o^lv^{e a d}^e^ter^mⁱⁿ^atioⁿ^sh^{all in}^v^o^lv^{e a d}^e^ter^mⁱⁿ^atioⁿ
^by^t^h^{e S}^E^C^on^w^h^et^h^e^{r t}^h^e^by^t^h^{e S}^E^C^on^w^h^et^h^e^{r t}^h^e
^ap^p^lican^{t is g}^r^an^ted^o^r^d^eⁿⁱ^ed^ap^p^lican^{t is g}^r^an^ted^o^r^d^eⁿⁱ^ed
^{NRSRO r}^e^gⁱ^str^a^tioⁿ^.^I^f^th^e^NR^S^R^{O reg}ⁱ^s^t^ratⁱ^oⁿ^.^If^t^h^e
^ag^en^cy^fⁱⁿ^d^s^s^u^f^fⁱ^cien^{t cau}^s^e^ag^en^cy^fⁱⁿ^d^s^s^u^f^fⁱ^cien^{t cau}^s^e
^f^o^r^an^ex^ten^s^ioⁿ^,^{it m}^a^y^f^o^r^an^ex^ten^s^ioⁿ^,^{it m}^a^y
^ex^ten^d^th^{e NRSRO}^ex^ten^d^th^{e NRSRO}
^regⁱ^s^t^ration^proceedin^g^f^o^{r u}^p^regⁱ^s^t^ration^proceedin^g^f^o^{r u}^p
^to⁹⁰^ad^d^itioⁿ^a^{l d}^a^y^s^.^to⁹⁰^ad^d^itioⁿ^a^{l d}^a^y^s^,^or^f^o^r
⁽^S^ectioⁿ⁴⁾^l^onger^perⁱ^ods^wⁱ^t^h^t^h^e
^applⁱ^c^ant^’s^cons^ent^.
⁽^S^ectioⁿ⁴⁾

^Provi^sⁱ^on^H.R^.²⁹⁹⁰^S^.³⁸⁵⁰
^G^r^o^{unds f}^o^{r t}^h^{e SEC’}^s^T^h^{e SEC}^s^h^{all g}^r^an^{t NR}^SR^O^T^h^{e SEC}^s^h^{all g}^r^an^{t NR}^SR^O
^d^eci^sⁱ^on^{to ap}^p^r^{ove an}^r^e^gⁱ^str^a^tioⁿ^if^{it f}ⁱⁿ^d^{s th}^{at th}^e^r^e^gⁱ^str^a^tioⁿ^if^{it f}ⁱⁿ^d^{s th}^{at th}^e
^a^pplicaⁿ^t^’^s^reg^ist^r^a^t^io^{n a}^s^requ^irem^en^ts^of^th^{e precedin}^g^requ^irem^en^ts^of^th^{e precedin}^g
^aⁿ^NRSRO^s^ection^{are s}^a^tis^fⁱ^{ed. It s}^h^all^s^ection^{are s}^a^tis^fⁱ^{ed. T}^h^e
^d^eⁿ^y^th^{e r}^e^gⁱ^str^a^tioⁿ^if^{it d}^o^e^s^ag^en^cy^s^h^{all den}^y
^no^t^m^a^ke^suc^h^a^fi^ndⁱ^ng.^Iⁿ^r^e^gⁱ^str^a^tioⁿ^if^{it f}ⁱⁿ^d^{s th}^{at th}^e
^th^{e ev}^en^{t th}^{at th}^{e applican}^{t is}^applican^t^does^not^have
^already^regⁱ^s^t^{ered, th}^at^adequat^{e f}ⁱ^nanci^a^l^and
^r^e^gi^st^r^a^tⁱ^o^{n w}^o^ul^d^b^e^sub^j^e^c^t^m^anagerⁱ^al^r^e^s^our^ces^t^o
^to^susp^eⁿ^sioⁿ^o^r^r^e^vo^c^a^tio^n.^consⁱ^s^t^e^nt^l^y^pr^{oduce r}^a^tⁱ^ngs
⁽^S^ectioⁿ⁴⁾^wⁱ^t^hⁱⁿ^t^e^grⁱ^t^y^{and t}^hat
^co^mp^{ly with}^{its p}^r^o^ced^u^r^es
^{and m}^e^t^hodol^ogy⁽^a^{s d}ⁱ^s-
^clos^{ed abov}^{e). In}^th^{e ev}^en^t
^th^{at th}^{e applican}^{t is}^already
^regⁱ^s^t^{ered, th}^{at reg}ⁱ^s^t^ration
^w^o^u^l^{d be s}^u^bj^ect^t^o
^susp^eⁿ^sioⁿ^o^r^r^e^vo^c^a^tio^n.
⁽^S^ectioⁿ⁴⁾
^Requirem^ent^s^f^o^{r upda}^tⁱ^ng^Gen^e^rally^{, credit ag}^en^cies^Gen^e^rally^{, credit ag}^en^cies
^an^ap^p^lⁱ^c^an^t’sⁱⁿ^form^ati^oⁿ^t^h^a^t^ha^ve^gaⁱⁿ^e^d^N^R^SO^t^h^a^t^ha^ve^gaⁱⁿ^e^d^N^R^SO
^r^e^gi^st^r^a^tⁱ^o^{n w}^o^ul^d^b^e^r^e^gi^st^r^a^tⁱ^o^{n w}^o^ul^d^b^e
^requⁱ^r^{ed t}^o^prom^pt^l^y^am^en^d^requⁱ^r^{ed t}^o^prom^pt^l^y^am^en^d
^th^eir^ap^p^licatioⁿ^s^w^ith^th^e^th^eir^ap^p^licatioⁿ^s^w^ith^th^e
^SE^{C i}^f^d^e^ve^l^o^p^m^eⁿ^t^s^ha^ve^SE^{C i}^f^d^e^ve^l^o^p^m^eⁿ^t^s^ha^ve
^ren^d^{ered prev}^iou^s^dis^c^los^u^res^ren^d^{ered prev}^iou^s^dis^c^los^u^res
^{to be m}^a^teriallyⁱⁿ^accu^rate.^{to be m}^a^teriallyⁱⁿ^accu^rate.
^Aⁿ^dⁿ^o^{t later}^th^an⁹⁰^d^a^y^s^Aⁿ^dⁿ^o^{t later}^th^an⁹⁰^d^a^y^s
^af^{ter th}^{e en}^{d of}^each^calen^dar^af^{ter th}^{e en}^{d of}^each^calen^dar
^y^{ear, th}^ey^w^o^u^l^{d als}^o^h^a^v^e^to^y^{ear, th}^ey^w^o^u^l^{d als}^o^h^a^v^e^to
^f^{ile r}^e^gⁱ^str^a^tioⁿ^am^en^d^m^en^ts^f^{ile r}^e^gⁱ^str^a^tioⁿ^am^en^d^m^en^ts
^w^ith^th^{e ag}^en^cy^{, certif}^yⁱⁿ^g^w^ith^th^{e ag}^en^cy^{, certif}^yⁱⁿ^g
^th^{e accu}^racy^of^th^eir^th^{e accu}^racy^of^th^eir
^dⁱ^sclo^su^r^e^{s an}^d^id^en^tif^yⁱⁿ^g^dⁱ^sclo^su^r^e^{s an}^d^id^en^tif^yⁱⁿ^g
^an^y^m^a^{terial ch}^an^g^e^s^sⁱⁿ^c^e^an^y^m^a^{terial ch}^an^g^e^s^sⁱⁿ^c^e
^th^{e prev}^iou^s^y^ear’^s^f^ilin^g^s^.^th^{e prev}^iou^s^y^ear’^s^f^ilin^g^s^.
⁽^S^ectioⁿ⁴⁾⁽^S^ectioⁿ⁴⁾

^Provi^sⁱ^on^H.R^.²⁹⁹⁰^S^.³⁸⁵⁰
^T^h^{e elem}^ents^{of the SE}^C’s^T^h^e^SE^{C w}^o^ul^d^ha^ve^t^h^e^T^h^e^SE^{C w}^o^ul^d^ha^ve^t^h^e
^au^th^ori^t^{y to en}^force^au^th^o^r^ity^to^tak^e^actioⁿ^au^th^o^r^ity^to^tak^e^actioⁿ
^NRSRO^a^cco^unt^a^b^ilit^y^ag^ain^s^{t NR}^SR^Os^w^h^{o v}ⁱ^olate^ag^ain^s^{t NR}^SR^Os^w^h^{o v}ⁱ^olate
^th^{e procedu}^r^es^{, criteria, an}^d^th^{e procedu}^r^es^{, criteria, an}^d
^m^e^t^h^odol^ogⁱ^e^s^con^t^aiⁿ^e^{d i}ⁿ^m^e^t^h^odol^ogⁱ^e^s^con^t^aiⁿ^e^{d i}ⁿ
^r^e^gⁱ^str^a^tioⁿ^ap^p^licatioⁿ^s^{. I}^t^r^e^gⁱ^str^a^tioⁿ^ap^p^licatioⁿ^s^{. I}^t
^als^o^w^o^u^l^{d au}^th^{orize th}^e^als^o^w^o^u^l^{d au}^th^{orize th}^e
^ag^en^cy^{to cen}^s^u^{re, place}^ag^en^cy^{to cen}^s^u^{re, place}
^lim^itatioⁿ^s^oⁿ^th^{e activ}^ities,^lim^itatioⁿ^s^oⁿ^th^{e activ}^ities,
^func^tⁱ^o^ns,^o^r^o^p^e^r^a^tⁱ^o^{ns o}^f^,^func^tⁱ^o^ns,^o^r^o^p^e^r^a^tⁱ^o^{ns o}^f^,
^s^u^s^p^en^{d f}^o^{r a peri}^{od n}^o^t^s^u^s^p^en^{d f}^o^{r a peri}^{od n}^o^t
^ex^ceedin^g^{12 m}^oⁿ^t^h^s^{, or}^ex^ceedin^g^{12 m}^oⁿ^t^h^s^{, or}
^r^e^vo^ke^t^h^e^r^e^gi^st^r^a^tⁱ^o^{n o}^f^aⁿ^y^r^e^vo^ke^t^h^e^r^e^gi^st^r^a^tⁱ^o^{n o}^f^aⁿ^y
^NR^SR^{O or pers}^on^as^s^o^ciated^NR^SR^{O or pers}^on^as^s^o^ciated
^w^ith^an^NR^SR^{O h}^a^s^been^w^ith^an^NR^SR^{O h}^a^s^been
^fo^und^t^o^:^a⁾^ha^ve^b^e^eⁿⁱⁿ^fo^und^t^o^:^a⁾^ha^ve^b^e^eⁿⁱⁿ
^vⁱ^o^l^atioⁿ^o^f^cer^tain^f^e^d^e^r^a^l^vⁱ^o^l^atioⁿ^o^f^cer^tain^f^e^d^e^r^a^l
^law^s^{; b) h}^a^v^e^been^con^vⁱ^cted^law^s^{; b) h}^a^v^e^been^con^vⁱ^cted
^du^riⁿ^g^t^h^{e 10-}^y^{ear peri}^od^du^riⁿ^g^t^h^{e 10-}^y^{ear peri}^od
^precedin^g^th^{e date of}^precedin^g^th^{e date of}
^furⁿⁱ^s^hi^{ng t}^h^e^N^R^SRO^furⁿⁱ^s^hi^{ng t}^h^e^N^R^SRO
^application^;^an^{d c) h}^a^v^e^been^application^;^{c) h}^a^v^e^been
^puⁿⁱ^s^h^{ed f}^o^{r an}^y^crim^{e th}^{at is}^puⁿⁱ^s^h^{ed f}^o^{r an}^y^crim^{e th}^{at is}
^puⁿⁱ^s^h^abl^e^byⁱ^m^pri^s^on^m^eⁿ^t^puⁿⁱ^s^h^abl^e^byⁱ^m^pri^s^on^m^eⁿ^t
^f^o^{r a peri}^{od of}^on^{e or m}^o^re^f^o^{r a peri}^{od of}^on^{e or m}^o^re
^y^ear^{s, o}^r^{a su}^b^s^tan^tially^y^ear^{s, o}^r^{a su}^b^s^tan^tially
^equⁱ^v^a^len^t^crim^{e by}^{a f}^o^reigⁿ^equⁱ^v^a^len^t^crim^{e by}^{a f}^o^reigⁿ
^co^u^r^{t. (}^S^ectioⁿ⁴⁾^cou^r^{t; an}^{d d)}^h^a^{ve fa}^iled^to
^{file th}^{e req}^uⁱ^red^certifica^tioⁿ^s
^or^t^o^m^aⁱⁿ^t^aⁱⁿ^adequat^e
^fⁱ^nanci^a^l^{and m}^anagerⁱ^al
^reso^u^r^{ces to}^coⁿ^s^isten^tly
^pr^{oduce cr}^edi^t^r^a^tⁱ^ngs^wⁱ^t^h
ⁱⁿ^teg^r^ity.⁽^S^ectioⁿ⁴⁾
^Lⁱ^mⁱ^tati^on^s^on^th^{e S}^E^C’s^Noⁿ^e^o^f^th^{e leg}ⁱ^slatioⁿ^’^{s r}^u^les^Noⁿ^e^o^f^th^{e leg}ⁱ^slatioⁿ^’^{s r}^u^les
^au^th^ori^t^{y over N}^R^S^R^O^s^oⁿ^th^{e SEC’}^{s au}^th^o^r^ity^o^v^er^oⁿ^th^{e SEC’}^{s au}^th^o^r^ity^o^v^er
^th^{e NRSRO r}^e^gⁱ^str^a^tioⁿ^th^{e NRSRO r}^e^gⁱ^str^a^tioⁿ
^p^r^o^{cess sh}^{all b}^eⁱⁿ^ter^p^r^e^ted^to^p^r^o^{cess sh}^{all b}^eⁱⁿ^ter^p^r^e^ted^to
^gⁱ^v^e^th^{e ag}^en^cy^th^{e au}^th^ority^gⁱ^v^e^th^{e ag}^en^cy^th^{e au}^th^ority
^{to reg}^u^l^{ate th}^{e s}^u^bs^tan^{ce of}^{to reg}^u^l^{ate th}^{e s}^u^bs^tan^{ce of}
^cr^ed^{it r}^a^tin^g^s^o^r^th^e^cr^ed^{it r}^a^tin^g^s^o^r^th^e
^procedu^r^es^an^d^procedu^r^es^an^d
^m^e^t^h^odol^ogⁱ^e^s^by^w^hⁱ^c^h^m^e^t^h^odol^ogⁱ^e^s^by^w^hⁱ^c^h
^{NRSROs d}^e^ter^mⁱⁿ^{e r}^a^tin^g^s^.^{NRSROs d}^e^ter^mⁱⁿ^{e r}^a^tin^g^s^.
^{Public a}^v^a^ila^bilit^y^o^f^G^eⁿ^e^ral^l^y^{, u}^pon^beiⁿ^g^G^eⁿ^e^ral^l^y^{, u}^pon^beiⁿ^g
^info^rm^a^t^io^{n NRSROs}^regⁱ^s^t^{ered as}^an^NR^SR^{O by}^regⁱ^s^t^{ered as}^an^NR^SR^{O by}
^subm^it^t^o^t^h^{e SEC}^th^{e SEC}^,^{a credit ratin}^g^th^{e SEC}^,^{a credit ratin}^g
^ag^en^cy^m^u^s^t^m^a^k^e^th^e^ag^en^cy^m^u^s^t^m^a^k^e^th^e
ⁱⁿ^f^o^r^m^atioⁿ^an^d^d^o^c^u^m^en^{ts it}ⁱⁿ^f^o^r^m^atioⁿ^an^d^d^o^c^u^m^en^{ts it}
^f^u^rn^is^h^e^{d to th}^{e ag}^en^cy^as^f^u^rn^is^h^e^{d to th}^{e ag}^en^cy^as
^p^a^r^t^o^f^th^{e r}^e^gⁱ^str^a^tioⁿ^p^a^r^t^o^f^th^{e r}^e^gⁱ^str^a^tioⁿ
^p^r^o^{cess p}^u^b^licly^av^ailab^l^e^p^r^o^{cess p}^u^b^licly^av^ailab^l^e
^t^h^r^o^{ugh e}ⁱ^t^h^e^rⁱ^t^s^w^e^b^sⁱ^t^e^o^r^t^h^r^o^{ugh e}ⁱ^t^h^e^rⁱ^t^s^w^e^b^sⁱ^t^e^o^r
^an^altern^ativ^{e readily}^an^altern^ativ^{e readily}
^acces^sⁱ^{ble m}^ean^s^.^acces^sⁱ^{ble m}^ean^s^.

^Provi^sⁱ^on^H.R^.²⁹⁹⁰^S^.³⁸⁵⁰
^S^E^C^ad^op^ti^on^{of ru}^l^e^s^to^T^h^{e S}^E^C^s^h^al^l^adopt^ru^l^e^s^or^T^h^{e S}^E^C^s^h^al^l^adopt^ru^l^e^s^or
^prev^ent^mⁱ^{suse o}^f^no^npublic^r^e^g^u^l^atioⁿ^s^to^r^e^q^u^ir^{e p}^o^licies^r^e^g^u^l^atioⁿ^s^to^r^e^q^u^ir^{e p}^o^licies
^inf^o^rm^a^t^ioⁿ^{or procedu}^r^es^desⁱ^gⁿ^e^{d t}^o^{or procedu}^r^es^desⁱ^gⁿ^e^{d t}^o
^prev^en^{t NR}^SR^Os^f^r^om^th^e^prev^en^{t NR}^SR^Os^f^r^om^th^e
^mⁱ^suse^o^f^the^m^a^te^rⁱ^a^l^,^mⁱ^suse^o^f^the^m^a^te^rⁱ^a^l^,
ⁿ^oⁿ^p^u^b^{lic in}^f^o^r^m^atioⁿ^th^atⁿ^oⁿ^p^u^b^{lic in}^f^o^r^m^atioⁿ^th^at
^th^ey^{collect. (Section}⁴⁾^th^ey^{collect. (Section}⁴⁾
^S^E^C^ad^op^ti^on^{of ru}^l^e^s^for^T^h^{e SEC}^,^as^{it deem}^s^T^h^{e SEC sh}^{all issu}^{e r}^u^{les to}
^{the prevention of conflicts}ⁿ^eces^s^a^ry^{or appropri}^a^t^e^,^p^r^o^h^ib^{it, o}^r^r^e^q^u^ir^{e th}^e
^{of interes}^t^s^h^al^l^adopt^ru^l^e^s^or^m^a^na^ge^m^e^nt^aⁿ^d^dⁱ^sc^l^o^sur^e
^r^e^g^u^l^atioⁿ^s^to^p^r^o^h^ib^{it, o}^r^o^f^{, an}^y^coⁿ^f^{licts o}^fⁱⁿ^ter^e^st
^r^e^q^uⁱ^r^e^t^h^e^m^a^na^ge^m^e^nt^o^r^r^e^latin^g^to^th^{e issu}^an^{ce o}^f
^dⁱ^sclo^su^r^e^o^f^{, an}^y^coⁿ^f^{licts o}^f^ratin^g^s^b^y^an^NR^SR^{O th}^at
ⁱⁿ^ter^e^{st r}^e^latin^g^to^th^e^sh^{all in}^clu^d^{e (}¹⁾^th^{e m}^aⁿⁿ^e^r
^is^s^u^an^{ce of}^ratin^g^s^by^an^o^f^an^NR^SR^O’^s
^{NRSRO th}^{at sh}^{all in}^clu^d^{e (}¹⁾^co^m^p^en^satioⁿ^f^o^r^r^a^tin^g^s^o^r
^th^{e m}^aⁿⁿ^e^{r of}^an^NR^SR^O’^s^r^e^lated^ser^v^{ices; (}²⁾^th^e
^co^m^p^en^satioⁿ^f^o^r^r^a^tin^g^s^o^r^c^o^nsul^tⁱ^ng,^a^d^vi^so^r^y^,^o^r^o^t^he^r
^r^e^lated^ser^v^{ices; (}²⁾^th^e^s^e^rv^ices^prov^{ided by}^an
^c^o^nsul^tⁱ^ng,^a^d^vi^so^r^y^,^o^r^o^t^he^r^NR^S^R^O;^{(3) t}^h^{e n}^a^t^u^{re of}^t^h^e
^s^e^rv^ices^prov^{ided by}^an^b^u^sine^{ss tie}^s,^o^w^ne^r^s^hip
^{NRSRO; (}³⁾^th^{e n}^a^tu^r^e^o^f^th^eⁱⁿ^ter^e^{sts, o}^r^o^t^h^e^r^fⁱⁿ^aⁿ^c^{ial o}^r
^b^u^sine^{ss tie}^s,^o^w^ne^r^s^hip^pers^on^{al as}^s^o^ciation^s^betw^een
ⁱⁿ^ter^e^{sts, o}^r^o^t^h^e^r^fⁱⁿ^aⁿ^c^{ial o}^r^an^{NRSRO an}^d^en^{tities w}^h^o
^pers^on^{al as}^s^o^ciation^s^betw^een^d^o^b^u^sin^e^{ss w}^ith^{it; (}⁴⁾
^an^{NRSRO an}^d^en^{tities w}^h^o^af^f^iliatioⁿ^s^b^e^tw^een^an
^d^o^b^u^sin^e^{ss w}^ith^{it; an}^d⁽⁴⁾^{NRSRO an}^d^en^{tities th}^at
^af^f^iliatioⁿ^s^b^e^tw^een^an^uⁿ^d^er^w^r^{ite th}^{e secu}^r^{ities o}^r
^{NRSRO an}^d^en^{tities th}^at^moⁿ^e^{y ma}^r^k^e^tⁱⁿ^s^t^r^u^meⁿ^t^s
^uⁿ^d^er^w^r^{ite th}^{e secu}^r^{ities o}^r^rat^e^{d by}^t^h^{e N}^R^S^R^O^;^an^{d (5)}
^moⁿ^e^{y ma}^r^k^e^tⁱⁿ^s^t^r^u^meⁿ^t^s^aⁿ^y^o^t^h^e^{r p}^o^t^en^tia^{l co}ⁿ^flicts
^rat^e^{d by}^t^h^{e N}^R^S^R^O^.^o^fⁱⁿ^{terest th}^a^t^th^{e S}^E^C
⁽^S^ectioⁿ⁴⁾^d^e^e^m^{s n}^e^c^e^ssa^ry^fo^{r th}^e
^p^u^b^{lic in}^{terest o}^r^fo^{r th}^e
^pr^ot^ectⁱ^{on of}ⁱⁿ^ves^t^o^r^s^.
⁽^S^ectioⁿ⁴⁾

^Provi^sⁱ^on^H.R^.²⁹⁹⁰^S^.³⁸⁵⁰
^S^E^C^ad^op^ti^on^{of ru}^l^e^s^for^T^h^{e S}^E^C^m^a^y^adopt^ru^l^e^s^or^T^h^{e S}^E^C^m^a^y^adopt^ru^l^e^s^or
^{the prevention of}^r^e^g^u^l^atioⁿ^s^r^e^latin^g^to^r^e^g^u^l^atioⁿ^s^r^e^latin^g^to
^p^r^ohⁱ^bⁱ^t^ed^acts^an^d^NR^SR^{Os: (1}^{) seek}ⁱⁿ^g^NR^SR^{Os : (1}^{) seek}ⁱⁿ^g
^practices^pay^m^en^{t f}^o^{r a credit ratin}^g^pay^m^en^{t f}^o^{r a credit ratin}^g
^th^{at h}^a^sⁿ^o^{t been}^s^p^ecifⁱ^cally^th^{at h}^a^sⁿ^o^{t been}^s^p^ecifⁱ^cally
^requ^es^t^e^{d by}^t^h^{e i}^s^s^u^{er (an}^requ^es^t^e^{d by}^t^h^{e i}^s^s^u^{er (an}
^uⁿ^s^o^licited^r^a^tin^g⁾^{; (}²⁾^uⁿ^s^o^licited^r^a^tin^g⁾^{; (}²⁾
^coⁿ^d^itioⁿⁱⁿ^g^o^r^th^r^eatenⁱⁿ^g^coⁿ^d^itioⁿⁱⁿ^g^o^r^th^r^eatenⁱⁿ^g
^to^coⁿ^d^itioⁿ^th^{e issu}^an^{ce o}^f^a^to^coⁿ^d^itioⁿ^th^{e issu}^an^{ce o}^f^a
^cr^ed^{it r}^a^tin^g^oⁿ^th^{e issu}^er^’^s^cr^ed^{it r}^a^tin^g^oⁿ^th^{e issu}^er^’^s
^pu^rch^a^s^e^of^ot^h^e^{r s}^e^rvⁱ^ces^or^pu^rch^a^s^e^of^ot^h^e^{r s}^e^rvⁱ^ces^or
^produ^ct^s^;^{(3) l}^o^w^e^riⁿ^g^or^produ^ct^s^;^{(3) l}^o^w^e^riⁿ^g^or
^th^reatenⁱⁿ^g^{to low}^e^{r a credit}^th^reatenⁱⁿ^g^{to low}^e^{r a credit}
^r^a^tⁱ^{ng o}ⁿ^,^o^r^r^e^fusi^{ng t}^o^r^a^t^e^,^r^a^tⁱ^{ng o}ⁿ^,^o^r^r^e^fusi^{ng t}^o^r^a^t^e^,
^secu^r^{ities o}^r^m^oⁿ^e^y^m^a^r^k^et^secu^r^{ities o}^r^m^oⁿ^e^y^m^a^r^k^et
^instr^u^m^e^{nts issue}^d^b^y^aⁿ^a^sse^t^instr^u^m^e^{nts issue}^d^b^y^aⁿ^a^sse^t
^pool^uⁿ^l^es^s^{a port}ⁱ^oⁿ^of^t^h^e^pool^uⁿ^l^es^s^{a port}ⁱ^oⁿ^of^t^h^e
^as^s^e^t^s^wⁱ^t^hⁱⁿ^s^u^ch^pool^al^s^oⁱ^s^as^s^e^t^s^wⁱ^t^hⁱⁿ^s^u^ch^pool^al^s^oⁱ^s
^rat^e^{d by}^t^h^{e N}^R^S^R^O^;^an^{d (4)}^rat^e^{d by}^t^h^{e N}^R^S^R^O^;^an^{d (4)}
^m^o^dⁱ^fyⁱ^{ng o}^r^t^h^r^e^a^t^eⁿⁱ^{ng t}^o^m^o^dⁱ^fyⁱ^{ng o}^r^t^h^r^e^a^t^eⁿⁱ^{ng t}^o
^m^odif^y^{a credit ratin}^g^or^m^odif^y^{a credit ratin}^g^or
^ot^h^e^rwⁱ^s^{e depart}ⁱⁿ^g^f^r^omⁱ^t^s^ot^h^e^rwⁱ^s^{e depart}ⁱⁿ^g^f^r^omⁱ^t^s
^s^t^an^{dard m}^e^t^h^odol^ogⁱ^e^s^f^o^r^s^t^an^{dard m}^e^t^h^odol^ogⁱ^e^s^f^o^r
^d^e^ter^mⁱⁿⁱⁿ^g^cr^ed^{it r}^a^tin^g^s^,^d^e^ter^mⁱⁿⁱⁿ^g^cr^ed^{it r}^a^tin^g^s^,
^bas^e^{d on}^w^h^et^h^e^{r an}ⁱ^s^s^u^er^bas^e^{d on}^w^h^et^h^e^{r an}ⁱ^s^s^u^er
^p^a^y^s^o^r^w^{ill p}^a^y^f^o^r^th^{e cr}^ed^it^p^a^y^s^o^r^w^{ill p}^a^y^f^o^r^th^{e cr}^ed^it
^ratⁱⁿ^g^{or an}^y^ot^h^e^{r of}^t^h^e^ratⁱⁿ^g^{or an}^y^ot^h^e^{r of}^t^h^e
^NR^SR^O’^{s serv}^{ices o}^r^NR^SR^O’^{s serv}^{ices o}^r
^produ^ct^s^.^(S^ectⁱ^oⁿ⁴⁾^produ^ct^s^.^(S^ectⁱ^oⁿ⁴⁾
^{NRSRO requirem}^ents^for^Each^{NRSO sh}^{all d}^e^sigⁿ^a^{te a}^Each^{NRSO sh}^{all d}^e^sigⁿ^a^{te a}
^com^p^{liance officers}^and^com^p^lian^{ce of}^fⁱ^{cer w}^ith^com^p^lian^{ce of}^fⁱ^{cer w}^ith
^fⁱ^na^ncia^{l co}^nditⁱ^oⁿ^da^t^a^r^e^sp^oⁿ^sib^ility^f^o^r^en^su^rⁱⁿ^g^r^e^sp^oⁿ^sib^ility^f^o^r^en^su^rⁱⁿ^g
^co^m^p^lian^{ce w}^ith^th^e^co^m^p^lian^{ce w}^ith^th^e
^secu^r^{ities law}^s^.^secu^r^{ities law}^s^.
^Iⁿ^ad^d^itioⁿ^,^th^{e SEC is g}ⁱ^v^eⁿ^Iⁿ^ad^d^itioⁿ^,^th^{e SEC is g}ⁱ^v^eⁿ
^th^{e au}^th^o^r^ity^to^r^e^q^u^ir^e^th^{e au}^th^o^r^ity^to^r^e^q^u^ir^e
^{NRSROs to}^p^r^o^v^id^{e it w}^ith^{NRSROs to}^p^r^o^v^id^{e it w}^ith
^coⁿ^f^id^en^{tial, in}^d^e^p^eⁿ^d^en^tly^coⁿ^f^id^en^{tial, in}^d^e^p^eⁿ^d^en^tly
^au^d^ited^fⁱⁿ^aⁿ^c^{ial statem}^en^ts^au^d^ited^fⁱⁿ^aⁿ^c^{ial statem}^en^ts
^oⁿ^th^eir^fⁱⁿ^aⁿ^c^{ial co}ⁿ^d^itioⁿ^s^,^oⁿ^th^eir^fⁱⁿ^aⁿ^c^{ial co}ⁿ^d^itioⁿ^s^,
^th^{e s}^p^ecifⁱ^{c n}^a^tu^{re of}^th^e^th^{e s}^p^ecifⁱ^{c n}^a^tu^{re of}^th^e
^f^ilin^g^s^an^d^th^{e in}^ter^v^al^f^ilin^g^s^an^d^th^{e in}^ter^v^al
^b^e^tw^een^su^ch^f^ilin^g^s^to^b^e^b^e^tw^een^su^ch^f^ilin^g^s^to^b^e
^determⁱⁿ^{ed by}^th^{e ag}^en^cy^.^determⁱⁿ^{ed by}^th^{e ag}^en^cy^.
⁽^S^ectioⁿ⁴⁾⁽^S^ectioⁿ⁴⁾
^N^o^ti^{ce to oth}^{er agen}^cⁱ^e^s^of^W^ithⁱⁿ³⁰^d^a^y^s^af^ter^th^{e d}^a^te^W^ithⁱⁿ³⁰^d^a^y^s^af^ter^th^{e d}^a^te
^{the changes}^{in the}^of^en^actm^eⁿ^t^{, th}^{e SEC}^s^h^all^of^en^actm^eⁿ^t^{, th}^{e SEC}^s^h^all
^treatm^{ent of the term}ⁿ^o^tif^y^f^e^{deral ag}^en^cies^w^h^os^eⁿ^o^tif^y^f^e^{deral ag}^en^cies^w^h^os^e
^NRSRO^r^u^l^e^{s o}^r^r^e^gul^a^tⁱ^o^{ns use}^t^h^e^r^u^l^e^{s o}^r^r^e^gul^a^tⁱ^o^{ns use}^t^h^e
^ter^m^“ⁿ^atioⁿ^a^lly^r^eco^gⁿⁱ^zed^ter^m^“ⁿ^atioⁿ^a^lly^r^eco^gⁿⁱ^zed
^{statistical r}^a^tin^g^o^r^g^aⁿⁱ^zatioⁿ^”^{statistical r}^a^tin^g^o^r^g^aⁿⁱ^zatioⁿ^”
^o^f^th^{e law}^’^{s ch}^an^g^e^{s in}^th^e^o^f^th^{e law}^’^{s ch}^an^g^e^{s in}^th^e
^tr^eatm^eⁿ^t^o^f^th^{e ter}^m^.^tr^eatm^eⁿ^t^o^f^th^{e ter}^m^.
⁽^S^ectioⁿ⁴⁾⁽^S^ectioⁿ⁴⁾

^Provi^sⁱ^on^H.R^.²⁹⁹⁰^S^.³⁸⁵⁰
^N^o^w^aⁱ^v^{er of ri}^gh^{t of acti}^on^Noⁿ^e^N^R^SRO^r^e^gi^s^t^r^a^tⁱ^{on does}^not
^{and no creation of a private}^coⁿ^s^titu^{te a}^wa^{iver o}^f^aⁿ^y
^ri^gh^{t of acti}^on^rⁱ^ght^t^hat^t^h^{e N}^R^SRO^mⁱ^ght
^ot^her^wⁱ^s^{e have under}^s^t^at^{e or}
^fed^e^ra^{l la}^{w. No}^rep^o^r^ts
^pr^ovi^d^{ed by an N}^R^SRO^s^hal^l
^cr^eat^e^{a pr}ⁱ^v^at^{e r}ⁱ^ght^of
^actⁱ^on.⁽^S^ectioⁿ⁴⁾
^R^e^vi^ew^{of ex}ⁱ^s^tiⁿ^g^Wi^t^hⁱⁿ^{360 day}^s^af^t^e^{r t}^h^e^Wi^t^hⁱⁿ^{270 day}^s^af^t^e^{r t}^h^e
^reg^ula^t^io^ns^{date of}^en^actm^eⁿ^t^{, th}^{e SEC}^{date of}^en^actm^eⁿ^t^{, th}^{e SEC}
^sh^{all r}^e^vⁱ^ew^{its ex}^istin^g^r^u^les^sh^{all r}^e^vⁱ^ew^{its ex}^istin^g^r^u^les
^an^{d reg}^u^l^ation^s^th^{at em}^ploy^an^{d reg}^u^l^ation^s^th^{at em}^ploy
^th^{e ter}^m^“ⁿ^atioⁿ^a^lly^th^{e ter}^m^“ⁿ^atioⁿ^a^lly
^recogⁿⁱ^{zed s}^t^atis^{tical ratin}^g^recogⁿⁱ^{zed s}^t^atis^{tical ratin}^g
^o^r^gaⁿⁱ^z^a^tⁱ^o^n”^o^r^“N^RSRO^”^o^r^gaⁿⁱ^z^a^tⁱ^o^n”^o^r^“N^RSRO^”
^an^{d prom}^u^l^g^a^t^eⁿ^e^w^or^an^{d am}^en^{d or rev}ⁱ^s^e^s^u^ch
^r^e^vi^se^d^r^u^l^e^{s a}ⁿ^d^r^e^gul^a^tⁱ^o^ns^ru^lesⁱⁿ^accordan^{ce w}^ith^th^e
^as^{it deem}^sⁿ^eces^s^a^ry^f^o^r^g^o^{als o}^f^th^{is law}^{as it d}^eem^s
^eith^er^th^{e p}^u^b^{lic in}^ter^e^{st o}^rⁿ^eces^s^a^ry^f^o^{r eith}^{er th}^{e pu}^blic
^t^h^{e prot}^ectⁱ^oⁿ^ofⁱⁿ^v^e^s^t^ors^.ⁱⁿ^ter^e^{st o}^r^th^{e p}^r^o^t^ectioⁿ^o^f
⁽^S^ectioⁿ⁴⁾ⁱ^nve^st^o^r^s.⁽^S^e^c^tⁱ^o^{n 4}⁾
^Co^nf^o^r^mⁱ^ng^a^m^endm^ent^s^P^r^ov^ides^f^o^{r con}^f^ormⁱⁿ^g^P^r^ov^ides^f^o^{r con}^f^ormⁱⁿ^g
^am^en^dm^en^ts^{to s}^e^v^e^ral^am^en^dm^en^ts^{to s}^e^v^e^ral
^Fe^d^e^r^a^l^st^a^t^ut^e^s^,ⁱⁿ^c^l^udⁱ^{ng t}^h^e^Fe^d^e^r^a^l^st^a^t^ut^e^s^,ⁱⁿ^c^l^udⁱ^{ng t}^h^e
^Secu^r^{ities Ex}^ch^an^g^e^A^c^{t o}^f^Secu^r^{ities Ex}^ch^an^g^e^A^c^{t o}^f
^{1934, t}^h^{e In}^v^e^s^t^m^eⁿ^t^{1934, t}^h^{e In}^v^e^s^t^m^eⁿ^t
^C^o^m^p^an^y^A^c^t^of^{1940, t}^h^e^C^o^m^p^an^y^A^c^t^of^{1940, t}^h^e
^I^nve^st^m^e^nt^A^d^vi^se^r^s^A^c^t^o^f^I^nve^st^m^e^nt^A^d^vi^se^r^s^A^c^t^o^f
^{1940, an}^{d t}^h^{e H}^o^u^sⁱⁿ^g^an^d^{1940, an}^{d t}^h^{e H}^o^u^sⁱⁿ^g^an^d
^Co^m^m^uⁿ^ity^Dev^e^lo^p^m^en^{t A}^c^t^Co^m^m^uⁿ^ity^Dev^e^lo^p^m^en^{t A}^c^t
^of^1992.^of^1992.
^a^.^Iⁿ^th^{e q}^u^alitativ^{e ap}^p^r^o^achⁱⁿ^f^o^r^m^atioⁿ^{is g}^l^ean^ed^f^r^o^m^an^aly^s^ts’^tr^ip^{s to}^th^{e r}^a^ted^fⁱ^r^m^.^Iⁿ^t^h^e
^q^u^an^titativ^{e ap}^p^r^o^achⁱⁿ^f^o^r^m^atioⁿ^{is g}^l^e^aⁿ^e^d^f^r^o^m^th^{e r}^a^ted^fⁱ^r^m^’^s^p^u^b^licly^av^ailab^l^{e f}ⁱⁿ^aⁿ^c^ial
^s^t^atem^en^ts^.