[Federal Register Volume 74, Number 153 (Tuesday, August 11, 2009)]
[Notices]
[Pages 40246-40247]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-19125]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60451; August 5, 2009]


Notice Regarding the Requirement To Use eXtensible Business 
Reporting Language Format To Make Publicly Available the Information 
Required Pursuant to Rule 17g-2(d) of the Exchange Act

AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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SUMMARY: The Commission today is providing notice that an NRSRO subject 
to the disclosure provisions of paragraph (d) of Rule 17g-2 can satisfy 
the requirement to make publicly available ratings history information 
in an XBRL format by using an XBRL format or any other machine-readable 
format, until such time as the Commission provides further notice.

DATES: The compliance date for Rule 17g-2(d) is August 10, 2009.

FOR FURTHER INFORMATION CONTACT: Michael A. Macchiaroli, Associate 
Director, at (202) 551-5525; Thomas K. McGowan, Deputy Associate 
Director, at (202) 551-5521; Randall W. Roy, Assistant Director, at 
(202) 551-5522; Joseph I. Levinson, Special Counsel, at (202) 551-5598; 
or Rebekah E. Goshorn, Attorney, at (202), 551-5514; Division of 
Trading and Markets, Securities and Exchange Commission; 100 F Street, 
NE., Washington, DC 20549-7010.

SUPPLEMENTARY INFORMATION:

I. Background

    The Credit Rating Agency Reform Act of 2006 (``Rating Agency Act'') 
\1\ defined the term ``nationally recognized statistical rating 
organization'' (``NRSRO'') and provided authority for the Securities 
and Exchange Commission (``Commission'') to implement registration, 
recordkeeping, financial reporting, and oversight rules with respect to 
registered credit rating agencies. The regulations implemented by the 
Commission pursuant to this mandate include Securities Exchange Act of 
1934 (``Exchange Act'') Rule 17g-2,\2\ which requires an NRSRO to make 
and retain certain records relating to its business and to retain 
certain other business records made in the normal course of business 
operations.
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    \1\ Public Law 109-291 (2006).
    \2\ 17 CFR 240.17g-2.
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    On February 2, 2009, the Commission adopted amendments to its NRSRO 
rules imposing additional requirements on NRSROs in order to address 
concerns about the integrity of their credit rating procedures and 
methodologies.\3\ Among other things, the rule amendments added new 
paragraphs (a)(8) and (d) to Rule 17g-2. New paragraph (a)(8) of Rule 
17g-2 requires an NRSRO to make and retain a record for each 
outstanding credit rating it maintains showing all rating actions 
(initial rating, upgrades, downgrades, placements on watch for upgrade 
or downgrade, and withdrawals) and the date of such actions identified 
by the name of the security or obligor rated and, if applicable, the 
CUSIP for the rated security or the Central Index Key (CIK) number for 
the rated obligor.\4\ New paragraph (d) of Rule 17g-2 requires an NRSRO 
to make publicly available, on a six-month delayed basis, the ratings 
histories for a random sample of 10% of the credit ratings paid for by 
the obligor being rated or by the issuer, underwriter, or sponsor of 
the security being rated (``issuer-paid credit ratings'') pursuant to 
paragraph (a)(8) of Rule 17g-2 for each class of credit rating for 
which the NRSRO is registered and has issued 500 or more issuer-paid 
credit ratings.\5\
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    \3\ See Amendments to Rules for Nationally Recognized 
Statistical Rating Organizations, Exchange Act Release No. 59342 
(February 2, 2009), 74 FR 6456 (``February 2009 Adopting Release'').
    \4\ 17 CFR 240.17g-2(a)(8).
    \5\ 17 CFR 240.17g-2(d).
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    Paragraph (d) of Rule 17g-2 further requires that this information 
be made public on the NRSRO's corporate Internet Web site in eXtensible 
Business Reporting Language (``XBRL'') format.\6\ The rule provides 
that in preparing the XBRL disclosure, an NRSRO must use the List of 
XBRL Tags for NRSROs as specified on the Commission's Web site.\7\ The 
Commission established a

[[Page 40247]]

compliance date of August 10, 2009 for this provision.
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    \6\ Id.
    \7\ Id. The February 2009 Adopting Release specified a 
compliance date of 180 days after publication in the Federal 
Register.
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    The Commission today is providing notice that an NRSRO subject to 
the disclosure provisions of paragraph (d) of Rule 17g-2 can satisfy 
the requirement to make publicly available ratings history information 
in an XBRL format by using an XBRL format or any other machine-readable 
format, until such time as the Commission provides further notice.

II. Discussion

    The Commission adopted Rule 17g-2 and the amendments thereto, in 
part, under authority to require NRSROs to make and keep for specified 
periods such records as the Commission prescribes as necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Exchange Act.\8\ In 
adopting new paragraph (d) to Rule 17g-2, the Commission noted that 
although NRSROs generally make their issuer-paid credit ratings 
publicly available for free, it can be difficult to compile the actions 
and compare them across NRSROs.\9\ The Commission therefore adopted the 
new disclosure requirements of paragraph (d) with the expectation that 
making this information more accessible will advance the Commission's 
goal of fostering accountability and comparability among NRSROs with 
respect to their issuer-paid credit ratings.\10\ Requiring NRSROs to 
publicly disclose rating action histories for a limited percentage of 
their outstanding issuer-paid credit ratings will allow market 
participants, academics and others to use the information to perform 
analysis comparing how the NRSROs subject to the disclosure rule 
perform in the classes of credit ratings for which they are 
registered.\11\
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    \8\ See Section 17(a)(1) of the Exchange Act (15 U.S.C. 
78q(a)(1)).
    \9\ See February 2009 Adopting Release, 74 FR at 6461.
    \10\ Id. at 6460.
    \11\ Id. at 6461.
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    As noted above, Rule 17g-2(d) provides that the ratings histories 
required under the rule must be made public on the NRSRO's corporate 
Internet Web site using an XBRL format.\12\ Further, the rule requires 
an NRSRO to use the List of XBRL Tags for NRSROs published on the 
Commission's Web page. The List of XBRL Tags currently is not 
available. Therefore, the Commission is providing notice to NRSROs that 
they can satisfy the requirement in Rule 17g-2(d) to make publicly 
available ratings history information in an XBRL format by using an 
XBRL format or any other machine readable format, until such time as 
the Commission provides further notice. The Commission has every 
intention of providing notice as soon as practicable, once the List of 
XBRL Tags for NRSROs is available, that an XBRL format is the sole 
means by which an NRSRO may satisfy this requirement. Examples of other 
types of machine-readable formats include pipe delimited text data 
(``PDTD'') and eXtensible Markup Language (``XML''). Data that is 
provided in a machine-readable format must be easily downloadable into 
commercially available spreadsheets or database programs.
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    \12\ 17 CFR 240.17g-2(d).
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    The Commission also notes that the requirement in Exhibit 1 to Form 
NRSRO which states that ``If the Applicant/NRSRO is required to make 
and keep publicly available on its corporate Internet Web site in an 
XBRL (eXtensible Business Reporting Language) format a sample of 
ratings action information pursuant to the requirements of 17 CFR 
240.17g-2(d), provide in this Exhibit the Web site address where this 
information is, or will be, made publicly available'' can be satisfied 
by providing the Web site address where the information is made 
publicly available in an XBRL format or any other machine readable 
format, until such time as the Commission provides further notice.

    By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-19125 Filed 8-10-09; 8:45 am]
BILLING CODE 8010-01-P