The U.S. Securities and Exchange Commission is seeking to ramp up its oversight of credit ratings agencies by enhancing disclosure and improving the quality of credit ratings.

The SEC Thursday voted unanimously to adopt or propose measures intended to improve the quality of credit ratings by requiring greater disclosure, fostering competition, helping to address conflicts of interest, shedding light on rating shopping, and promoting accountability.

It adopted rules designed to enable competing CRAs to offer unsolicited ratings for structured finance products, by granting them access to the necessary underlying data for structured products. It also adopted amendments to remove references to ratings from certain SEC rules.

The commission also proposed amendments that would require annual compliance reports and enhance disclosure of potential sources of revenue-related conflicts. It also proposed new rules that would require disclosure of information including what a credit rating covers, any material limitations on the scope of the rating, and whether there was any “ratings shopping.”

Finally, it is seeking public comment on whether to amend its rules to subject CRAs to liability when a rating is used in connection with a registered offering.

“These proposals are needed because investors often consider ratings when evaluating whether to purchase or sell a particular security,” said SEC chair Mary Schapiro, in a release. “That reliance did not serve them well over the last several years, and it is incumbent upon us to do all that we can to improve the reliability and integrity of the ratings process and give investors the appropriate context for evaluating whether ratings deserve their trust.”

IE