New rules adopted by the U.S. Securities and Exchange Commission will foster greater competition, transparency and innovation in the ratings industry, Fitch Ratings says.

“While the new rules remove regulatory barriers to entry and will bring change to the competitive landscape of the industry, Fitch believes the process stimulated an important debate among market participants which is an essential and constructive step in advancing a pro-competition mindset among capital market participants,” says Fitch.

Fitch adds that it is, “also very pleased that the SEC embraced their responsibility and mandate that the practice of notching in rating structured portfolio products as employed by some rating agencies is a serious issue that needs to be addressed in promoting a competitive environment in the ratings industry.

“Throughout the comment period, the proposed rules surrounding the notching issue were widely debated as many market participants weighed in on the debate and voiced concerns with this practice. Fitch believes that all market participants will greatly benefit from the commission commitment to eliminating abusive practices in the industry,” it concludes.