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‘‘(iii) supervised an employee de-
scribed in clause (ii). 
‘‘(B) PUBLIC DISCLOSURE.—Upon receiv-
ing such a report, the Commission shall make 
such information publicly available.’’; 
(7) by amending subsection (j) to read as fol-
lows: 
‘‘(j) DESIGNATION OF COMPLIANCE OFFICER.— 
‘‘(1) IN GENERAL.—Each nationally recognized 
statistical rating organization shall designate an in-
dividual to serve as a compliance officer. 
‘‘(2) DUTIES.—The compliance officer shall— 
‘‘(A) report directly to the board of the na-
tionally recognized statistical rating organiza-
tion; 
‘‘(B) review compliance with policies and 
procedures to manage conflicts of interest and 
assess the risk that the compliance (or lack of 
such compliance) may compromise the integrity 
of the credit rating process; 
‘‘(C) review compliance with the internal 
control system with respect to the procedures 
and methodologies for determining credit rat-
ings, including qualitative methodologies and 
quantitative inputs used in the rating process, 
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and assess the risk that such internal control 
system is reasonably designed to ensure the in-
tegrity and quality of the credit rating process; 
‘‘(D) in consultation with the board of the 
nationally recognized statistical rating organiza-
tion, resolve any conflicts of interest that may 
arise; 
‘‘(E) be responsible for administering the 
policies and procedures required to be estab-
lished pursuant to this section; 
‘‘(F) ensure compliance with securities 
laws and the rules and regulations issued there-
under, including rules prescribed by the Com-
mission pursuant to this section; and 
‘‘(G) establish procedures— 
‘‘(i) for the receipt, retention, and 
treatment of complaints regarding credit 
ratings, models, methodologies, and com-
pliance with the securities laws and the 
policies and procedures required under this 
section; 
‘‘(ii) for the receipt, retention, and 
treatment of confidential, anonymous com-
plaints by employees, obligors, issuers, and 
investors; 
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‘‘(iii) for the remediation of non-com-
pliance issues found during compliance of-
fice reviews, the reviews required under 
paragraph (7), internal or external audit 
findings, self-reported errors, or through 
validated complaints; and 
‘‘(iv) designed so that ratings that the 
nationally recognized statistical rating or-
ganization disseminates reflect consider-
ation of all information in a manner gen-
erally consistent with the nationally recog-
nized statistical rating organization’s pub-
lished rating methodology, including infor-
mation which is provided, received, or oth-
erwise obtained from obligor, issuer and 
non-issuer sources, such as investors, the 
media, and other interested or informed 
parties. 
‘‘(3) LIMITATIONS.—The compliance officer 
shall not, while serving in that capacity— 
‘‘(A) determine credit ratings; 
‘‘(B) participate in the establishment of 
the procedures and methodologies or the quali-
tative methodologies and quantitative inputs 
used to determine credit ratings; 
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‘‘(C) perform marketing or sales functions; 
or 
‘‘(D) participate in establishing compensa-
tion levels, other than for employees working 
for the compliance officer. 
‘‘(4) ANNUAL REPORTS REQUIRED.—The com-
pliance officer shall annually prepare and sign a re-
port on the compliance of the nationally recognized 
statistical rating organization with the securities 
laws and such organization’s internal policies and 
procedures, including its code of ethics and conflict 
of interest policies, in accordance with rules pre-
scribed by the Commission. Such compliance report 
shall accompany the financial reports of the nation-
ally recognized statistical rating organization that 
are required to be filed with the Commission pursu-
ant to this section and shall include a certification 
that, under penalty of law, the report is accurate 
and complete. 
‘‘(5) COMPENSATION.—The compensation of 
the compliance officer shall not be linked to the 
business performance of the nationally recognized 
statistical rating organization and shall be arranged 
so as to ensure the independence of the officer’s 
judgment.’’; 
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(8) in subsection (k)— 
(A) by striking ‘‘, on a confidential basis,’’; 
(B) by striking ‘‘furnish to’’ and inserting 
‘‘file with’’; 
(C) by striking ‘‘Each nationally’’ and in-
serting the following: 
‘‘(1) IN GENERAL.—Each nationally’’; and 
(D) by adding at the end the following new 
paragraph: 
‘‘(2) EXCEPTION.—The Commission may treat 
as confidential any information provided by a na-
tionally recognized statistical rating organization 
under this section consistent with applicable Federal 
laws or Commission rules.’’; 
(9) in subsection (l)(2)(A)(i), by striking ‘‘fur-
nished’’ and inserting ‘‘filed’’; 
(10) by amending subsection (p) to read as fol-
lows: 
‘‘(p) ESTABLISHMENT OF SEC OFFICE.— 
‘‘(1) IN GENERAL.—The Commission shall es-
tablish an office that administers the rules of the 
Commission with respect to the practices of nation-
ally recognized statistical rating organizations. 
‘‘(2) STAFFING.—The office of the Commission 
established under this subsection shall be staffed 
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sufficiently to carry out fully the requirements of 
this section. 
‘‘(3) RULEMAKING AUTHORITY.—The Commis-
sion shall— 
‘‘(A) establish, by rule, fines and other 
penalties for any nationally recognized statis-
tical rating organization that violates the appli-
cable requirements of this title; and 
‘‘(B) issue such rules as may be necessary 
to carry out this section with respect to nation-
ally recognized statistical rating organiza-
tions.’’; and 
(11) by adding after subsection (p) the fol-
lowing new subsections: 
‘‘(q) TRANSPARENCY OF RATINGS PERFORMANCE.— 
‘‘(1) RULEMAKING
REQUIRED.—The Commis-
sion shall, by rule, require each nationally recognized 
statistical rating organization to publicly disclose in-
formation on initial ratings and subsequent changes 
to such ratings for the purpose of providing a gauge 
of the performance of ratings and allowing investors 
to compare performance of ratings by different na-
tionally recognized statistical rating organizations. 
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‘‘(2) CONTENT.—The rules of the Commission 
under this subsection shall require, at a minimum, 
disclosures that— 
‘‘(A) are comparable among nationally rec-
ognized statistical rating organizations, so that 
investors can compare rating performance 
across rating organizations; 
‘‘(B) are clear and informative for a wide 
range of investor sophistication; 
‘‘(C) include performance information over 
a range of years and for a variety of classes of 
credit ratings, as determined by the Commis-
sion; 
‘‘(D) are published and made freely avail-
able by the nationally recognized statistical rat-
ing organization, on an easily accessible portion 
of its website and in written form when re-
quested by investors; and 
‘‘(E) each nationally recognized statistical 
rating organization include an attestation with 
any credit rating it issues affirming that no 
part of the rating was influenced by any other 
business activities, that the rating was based 
solely on the merits of the instruments being 
rated, and that such rating was an independent 
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evaluation of the risks and merits of the instru-
ment. 
‘‘(r) CREDIT RATINGS METHODOLOGIES.— 
‘‘(1) IN GENERAL.—The Commission shall pre-
scribe rules, in the public interest and for the pro-
tection of investors, that require each nationally rec-
ognized statistical rating organization to establish, 
maintain, and enforce written procedures and meth-
odologies and an internal control system with respect 
to such procedures and methodologies that are rea-
sonably designed to— 
‘‘(A) ensure that credit ratings are deter-
mined using procedures and methodologies, in-
cluding qualitative methodologies and quan-
titative inputs that are determined in accord-
ance with the policies and procedures of the na-
tionally recognized statistical rating organiza-
tion for developing and modifying credit rating 
procedures and methodologies; 
‘‘(B) ensure that when major changes to 
credit rating procedures and methodologies, in-
cluding to qualitative methodologies and quan-
titative inputs, are made, that the changes are 
applied consistently to all credit ratings to 
which the changed procedures and methodolo-
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gies apply and, to the extent the changes are 
made to credit rating surveillance procedures 
and methodologies, they are applied to current 
credit ratings within a time period to be deter-
mined by the Commission by rule, and that the 
reason for the change is publicly disclosed; 
‘‘(C) notify persons who have access to the 
credit ratings of the nationally recognized sta-
tistical rating organization, regardless of wheth-
er they are made readily accessible for free or 
a reasonable fee, of the procedure or method-
ology, including qualitative methodologies and 
quantitative inputs, used with respect to a par-
ticular credit rating; 
‘‘(D) notify persons who have access to the 
credit ratings of the nationally recognized sta-
tistical rating organization, regardless of wheth-
er they are made readily accessible for free or 
a reasonable fee, when a change is made to a 
procedure or methodology, including to quali-
tative methodologies and quantitative inputs, or 
an error is identified in a procedure or method-
ology that may result in credit rating actions, 
and the likelihood of the change resulting in 
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current credit ratings being subject to rating 
actions; and 
‘‘(E) use credit rating symbols that distin-
guish credit ratings for structured products 
from credit ratings for other products that the 
Commission determines appropriate or nec-
essary in the public interest and for the protec-
tion of investors. 
‘‘(2) RATING CLARITY AND CONSISTENCY.— 
‘‘(A) COMMISSION
OBLIGATION.—Subject 
to subparagraphs (B) and (C), the Commission 
shall require, by rule, each nationally recognized 
statistical rating organization to establish, 
maintain, and enforce written policies and pro-
cedures reasonably designed— 
‘‘(i) with respect to credit ratings of 
securities and money market instruments, 
to assess the risk that investors in securi-
ties and money market instruments may 
not receive payment in accordance with the 
terms of such securities and instruments; 
‘‘(ii) to define clearly any credit rating 
symbol used by that organization; and 
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‘‘(iii) to apply such credit rating sym-
bol in a consistent manner for all types of 
securities and money market instruments. 
‘‘(B) ADDITIONAL
CREDIT
FACTORS.— 
Nothing in subparagraph (A)— 
‘‘(i) prohibits a nationally recognized 
statistical rating organization from using 
additional credit factors that are docu-
mented and disclosed by the organization 
and that have a demonstrated impact on 
the risk an investor in a security or money 
market instrument will not receive repay-
ment in accordance with the terms of 
issuance; 
‘‘(ii) prohibits a nationally recognized 
statistical rating organization from consid-
ering credit factors that are unique to mu-
nicipal securities; or 
‘‘(iii) prohibits a nationally recognized 
statistical rating organization from using 
an additional symbol with respect to the 
ratings described in subparagraph (A)(i) 
for the purpose of distinguishing the rat-
ings of a certain type of security or money 
market instrument from ratings of any 
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other types of securities or money market 
instruments. 
‘‘(C) 
COMPLEMENTARY
RATINGS.—The 
Commission shall not impose any requirement 
under subparagraph (A) that prevents nation-
ally recognized statistical rating organizations 
from establishing ratings that are complemen-
tary to the ratings described in subparagraph 
(A)(i) and that are created to measure a dis-
crete aspect of the security’s or instrument’s 
risk. 
‘‘(s) TRANSPARENCY
OF CREDIT RATING METH-
ODOLOGIES AND INFORMATION REVIEWED.— 
‘‘(1) IN GENERAL.—The Commission shall re-
quire, by rule, a nationally recognized statistical rat-
ing organization to include with the publication of 
each credit rating regardless of whether the credit 
rating is made readily accessible for free or a rea-
sonable fee a form that discloses information about 
the assumptions underlying the procedures and 
methodologies used, and the data relied on, to deter-
mine the credit rating in the format prescribed in 
paragraph (2) and containing the information de-
scribed in paragraph (3). 
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