Document ID: SEC-2009-1152-0001
Agency: sec
Document Type: Notice
Title: Order Providing NRSROs a Temporary Exemption from the Requirement that CUSIP Numbers Be Displayed
Posted Date: 2009-08-14T04:00Z

[Federal Register: August 14, 2009 (Volume 74, Number 156)]
[Notices]               
[Page 41176-41177]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14au09-84]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60473; August 10, 2009]

 
Order Providing NRSROs a Temporary Exemption From the Requirement 
in Rule 17g-2(d) (Incorporating the Provisions of Rule 17g-2(a)(8)) of 
the Securities Exchange Act of 1934 That CUSIP Numbers Be Displayed

I. Background

    The Credit Rating Agency Reform Act of 2006 (``Rating Agency Act'') 
\1\ defined the term ``nationally recognized statistical rating 
organization''

[[Page 41177]]

(``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) ``identified by the name of the rated 
security or obligor and, if applicable, the CUSIP of the rated security 
or the Central Index Key (CIK) number of 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 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 XBRL tags are not yet available. Therefore, the Commission 
issued a Notice on August 5, 2009 that an NRSRO subject to the 
disclosure provisions of Rule 17g-2(d) 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.\8\
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    \8\ 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, Exchange Act 
Release No. 60451, August 5, 2009 (``August 5, 2009 Notice'').
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    As noted above, the required rating actions information includes, 
if applicable, the CUSIP of each rated security and the CIK number of 
each rated obligor. Although CIK numbers are available free of charge 
on the Commission's Web site, CUSIPs are owned and distributed by 
private parties.
    Subsequent to the issuance of the August 5, 2009 Notice, several 
NRSROs have notified Commission staff that, despite their efforts, they 
have not been able to resolve certain issues with the managers of the 
CUSIP program. The Commission believes, however, that users of credit 
ratings would benefit from having ratings action information available 
by the August 10, 2009 implementation date for Rule 17g-2(d), even if 
CUSIP numbers are not included for a limited time. We note that 
identifying information, such as the name of the security, will be 
included.
    For these reasons, the Commission finds that providing NRSROs a 
partial temporary exemption from Rule 17g-2(d) (incorporating the 
provisions of Rule 17g-2(a)(8)) is necessary and appropriate in the 
public interest and is consistent with the protection of investors.\9\ 
Therefore, the Commission is providing NRSROs with a 30-day exemption 
from the requirement in Rule 17g-2(d) (incorporating the provisions of 
Rule 17g-2(a)(8)) that the CUSIP for each rated security be included 
with the ratings action information.
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    \9\ Section 36 of the Exchange Act authorizes the Commission, by 
rule, regulation, or order, to conditionally or unconditionally 
exempt any person from any rule under the Exchange Act, to the 
extent that the exemption is necessary or appropriate in the public 
interest and is consistent with the protection of investors. 15 
U.S.C. 78mm.
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II. Conclusion

    Accordingly, pursuant to Section 36 of the Exchange Act,
    It is hereby ordered that NRSROs are temporarily exempt from the 
requirement in Rule 17g-2(d) (incorporating the provisions of Rule 17g-
2(a)(8)) that the CUSIP for each rated security be included with the 
ratings action information for thirty days, until September 9, 2009.

    By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-19478 Filed 8-13-09; 8:45 am]

BILLING CODE 8010-01-P