has been designated, sponsored, recommended, or ap-
proved, or that such nationally recognized statistical 
rating organization’s abilities or qualifications have 
in any respect been passed upon, by the United States 
or any agency, any officer, or any employee thereof. 
‘‘(2) REPRESENTATION AS NRSRO OF UNREGIS-
TERED CREDIT RATING AGENCIES.—It shall be unlaw-
ful for any credit rating agency to represent or imply 
in any manner whatsoever that such credit rating 
agency has been designated, sponsored, recommended, 
or approved, or that such credit rating agency’s abili-
ties or qualifications have in any respect been passed 
upon, by the United States or any agency, any offi-
cer, or any employee thereof. It shall be unlawful for 
any credit rating agency that is not registered under 
this section as a nationally recognized statistical rat-
ing organization to state that such credit rating agen-
cy is a nationally recognized statistical rating orga-
nization under this Act. 
‘‘(3) STATEMENT OF REGISTRATION UNDER SE-
CURITIES EXCHANGE ACT OF 1934 PROVISIONS.—No 
provision of paragraph (1) shall be construed to pro-
hibit a statement that a nationally recognized statis-
tical rating organization is a nationally recognized 
statistical rating organization under this Act, if such 
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statement is true in fact and if the effect of such reg-
istration is not misrepresented. 
‘‘(g) PREVENTION OF MISUSE OF NONPUBLIC INFOR-
MATION.—Each nationally recognized statistical rating or-
ganization shall establish, maintain, and enforce written 
policies and procedures reasonably designed, taking into 
consideration the nature of such nationally recognized sta-
tistical rating organization’s business, to prevent the misuse 
in violation of this title, or the rules or regulations there-
under, of material, nonpublic information by such nation-
ally recognized statistical rating organization or any per-
son associated with such nationally recognized statistical 
rating organization. The Commission, as it deems necessary 
or appropriate in the public interest or for the protection 
of investors, shall adopt rules or regulations to require spe-
cific policies or procedures reasonably designed to prevent 
misuse in violation of this title (or the rules or regulations 
thereunder) of material, nonpublic information. 
‘‘(h) MANAGEMENT OF CONFLICTS OF INTEREST.— 
Each nationally recognized statistical rating organization 
shall establish, maintain, and enforce written policies and 
procedures reasonably designed, taking into consideration 
the nature of the business of such nationally recognized sta-
tistical rating organization and affiliated persons and af-
filiated companies of such nationally recognized statistical 
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rating organization, to address and manage the conflicts 
of interest that can arise from such business. The Commis-
sion, as it deems necessary or appropriate in the public 
interest or for the protection of investors, shall adopt rules 
or regulations to prohibit, or require the management or 
disclosure of, any conflicts of interest relating to the 
issuance of credit ratings by a nationally recognized statis-
tical rating organization including, without limitation, 
conflicts of interest relating to— 
‘‘(1) the manner in which a nationally recog-
nized statistical rating organization is compensated 
by the obligor, or any affiliate of the obligor, for 
issuing credit ratings or providing related services; 
‘‘(2) the provision of consulting, advisory, or 
other services by a nationally recognized statistical 
rating organization, or any person associated with 
such nationally recognized statistical rating organiza-
tion, to the obligor, or any affiliate of the obligor; 
‘‘(3) business relationships, ownership interests, 
or any other financial or personal interests between 
a nationally recognized statistical rating organiza-
tion, or any person associated with such nationally 
recognized statistical rating organization, and the ob-
ligor, or any affiliate of the obligor; and 
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‘‘(4) any affiliation of a nationally recognized 
statistical rating organization, or any person associ-
ated with such nationally recognized statistical rating 
organization, with any person that underwrites the 
securities or money market instruments that are the 
subject of a credit rating. 
‘‘(i) PROHIBITED CONDUCT.— 
‘‘(1) PROHIBITED
ACTS
AND
PRACTICES.—The 
Commission may adopt rules or regulations to pro-
hibit any act or practice relating to the issuance of 
credit ratings by a nationally recognized statistical 
rating organization that the Commission determines 
to be unfair, coercive, or abusive, including any act 
or practice relating to— 
‘‘(A) seeking payment for a credit rating 
that has not been specifically requested by the ob-
ligor— 
‘‘(i) from an obligor; or 
‘‘(ii) from an affiliate of an obligor, 
unless— 
‘‘(I) the organization is organized 
under subsection (a)(1)(E) to receive 
fees from investors or other market 
participants, or a combination thereof; 
and 
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‘‘(II) the affiliate is such an in-
vestor or participant; 
‘‘(B) conditioning or threatening to condi-
tion the issuance of a credit rating on the obli-
gor’s, or an affiliate of the obligor’s, purchase of 
other services or products, including pre-credit 
rating assessment products, of the nationally rec-
ognized statistical rating organization or any 
person associated with such nationally recog-
nized statistical rating organization; 
‘‘(C) lowering or threatening to lower a 
credit rating on, or refusing to rate, securities or 
money market instruments issued by an asset 
pool unless a portion of the assets within such 
pool also is rated by the nationally recognized 
statistical rating organization; 
‘‘(D) modifying or threatening to modify a 
credit rating or otherwise departing from its 
adopted systematic procedures and methodologies 
in determining credit ratings, based on whether 
the obligor, or an affiliate of the obligor, pays or 
will pay for the credit rating or any other serv-
ices or products of the nationally recognized sta-
tistical rating organization or any person associ-
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ated with such nationally recognized statistical 
rating organization. 
‘‘(2) RULE
OF
CONSTRUCTION.—Nothing in 
paragraph (1), or in any rules or regulations adopted 
thereunder, shall be construed to modify, impair, or 
supersede the operation of any of the antitrust laws. 
For the purposes of the preceding sentence, the term 
‘antitrust laws’ has the meaning given it in the first 
section of the Clayton Act (15 U.S.C. 12), except that 
such term includes section 5 of the Federal Trade 
Commission Act (15 U.S.C. 45) to the extent such sec-
tion 5 applies to unfair methods of competition. 
‘‘(j) DESIGNATION OF COMPLIANCE OFFICER.—Each 
nationally recognized statistical rating organization shall 
designate an individual responsible for administering the 
policies and procedures that are required to be established 
pursuant to subsections (g) and (h), and for ensuring com-
pliance with the securities laws and the rules and regula-
tions thereunder, including those promulgated by the Com-
mission pursuant to this section. 
‘‘(k) STATEMENTS OF FINANCIAL CONDITION.—Each 
nationally recognized statistical rating organization shall, 
on a confidential basis, file with the Commission, at inter-
vals determined by the Commission, such financial state-
ments, certified (if required by the rules or regulations of 
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the Commission) by an independent public accountant, and 
information concerning its financial condition as the Com-
mission, by rule, may prescribe as necessary or appropriate 
in the public interest or for the protection of investors. 
‘‘(l) ELIMINATION
OF
COMMISSION
DESIGNATION 
PROCESS FOR NRSRO’S.— 
‘‘(1) CESSATION OF DESIGNATION.—Within 30 
days after the enactment of the Credit Rating Agency 
Duopoly Relief Act of 2006, the Commission shall 
cease to designate persons and companies as nation-
ally recognized statistical rating organizations, as 
that term is used under rule 15c3–1 of the Commis-
sion’s rules (17 CFR 240.15c3–1). 
‘‘(2) PROHIBITION ON RELIANCE ON NO-ACTION 
RELIEF.—The no-action relief that the Commission 
has granted with respect to the designation of nation-
ally recognized statistical rating organizations, as 
that term is used under rule 15c3–1 of the Commis-
sion’s rules (17 CFR 240.15c3–1), shall be void and 
of no force or effect. 
‘‘(3) NOTICE TO OTHER AGENCIES.—Within 30 
days after the date of enactment of the Credit Rating 
Agency Duopoly Relief Act of 2006, the Commission 
shall give notice to the Federal agencies which employ 
the term ‘nationally recognized statistical rating or-
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ganization’ (as that term is used under rule 15c3–1 
of the Commission’s rules (17 CFR 240.15c3–1)) in 
their rules and regulations regarding the actions un-
dertaken pursuant to this section. 
‘‘(4) REVIEW
OF
EXISTING
REGULATIONS.— 
Within 180 days after the date of enactment of the 
Credit Rating Agency Duopoly Relief Act of 2006, the 
Commission shall review its existing rules and regula-
tions which employ the term ‘nationally recognized 
statistical rating organization’ or ‘NRSRO’ and pro-
mulgate new or revised rules and regulations as the 
Commission may prescribe as necessary or appro-
priate in the public interest or for the protection of 
investors.’’. 
(b) CONFORMING AMENDMENTS TO THE 1934 ACT.— 
(1) 
Section 
15(b)(4)(B)(ii) 
(15 
U.S.C. 
78o(b)(4)(B)(ii)) is amended by inserting ‘‘nationally 
recognized statistical rating organization,’’ after 
‘‘transfer agent,’’. 
(2) Section 15(b)(4)(C) (15 U.S.C. 78o(b)(4)(C)) 
is amended by inserting ‘‘nationally recognized statis-
tical rating organization,’’ after ‘‘transfer agent,’’. 
(3) Section 21B(a) (15 U.S.C. 78u–2(a)) is 
amended by inserting ‘‘15E,’’ after ‘‘15C,’’. 
(c) OTHER CONFORMING AMENDMENTS.— 
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(1) Section 2(a) of the Investment Company Act 
of 1940 (15 U.S.C. 80a–2(a)) is amended by adding 
at the end the following new paragraph: 
‘‘(53) The term ‘credit rating agency’ has the 
same meaning as given in section 3 of the Securities 
Exchange Act of 1934.’’. 
(2) Section 9(a)(1) of the Investment Company 
Act of 1940 (15 U.S.C. 80a–9(a)) is amended by in-
serting ‘‘credit rating agency,’’ after ‘‘transfer 
agent,’’. 
(3) Section 9(a)(2) of the Investment Company 
Act of 1940 (15 U.S.C. 80a–9(a)) is amended by in-
serting ‘‘credit rating agency,’’ after ‘‘transfer 
agent,’’. 
(4) Section 202(a) of the Investment Advisers 
Act of 1940 (15 U.S.C. 80b–2(a)) is amended by add-
ing at the end the following new paragraph: 
‘‘(28) The term ‘credit rating agency’ has the 
same meaning as given in section 3 of the Securities 
Exchange Act of 1934.’’. 
(5) Section 203(e)(2)(B) of the Investment Advis-
ers Act of 1940 (15 U.S.C. 80b–3(e)) is amended by 
inserting ‘‘credit rating agency,’’ after ‘‘transfer 
agent,’’. 
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(6) Section 203(e)(4) of the Investment Advisers 
Act of 1940 (15 U.S.C. 80b–3(e)) is amended by in-
serting ‘‘credit rating agency,’’ after ‘‘transfer 
agent,’’. 
(7) Section 1319 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4519) is amend-
ed by striking ‘‘effectively’’ and all that follows 
through ‘‘broker-dealers’’ and inserting ‘‘that is a na-
tionally recognized statistical rating organization, as 
such term is defined in section 3(a) of the Securities 
Exchange Act of 1934’’. 
(8) Section 439 of the Higher Education Act of 
1965 (20 U.S.C. 1087–2) is amended in subsection 
(r)(15)(A) by striking ‘‘means any entity recognized 
as such by the Securities and Exchange Commission’’ 
and inserting ‘‘means any nationally recognized sta-
tistical rating organization as that term is defined 
under the Securities Exchange Act of 1934’’. 
(9) Section 601(10) of title 23, United States 
Code, is amended by striking ‘‘identified by the Secu-
rities and Exchange Commission as a Nationally 
Recognized Statistical Rating Organization’’ and in-
serting ‘‘registered with the Securities and Exchange 
Commission as a nationally recognized statistical rat-
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ing organization as that term is defined under the Se-
curities Exchange Act of 1934 (15 U.S.C. 78 et seq.)’’. 
SEC. 5. ANNUAL AND OTHER REPORTS. 
Section 17(a)(1) (15 U.S.C. 78q(a)(1)) is amended by 
inserting ‘‘nationally recognized statistical rating organiza-
tion,’’ after ‘‘registered transfer agent,’’. 
SEC. 6. GAO STUDY AND REPORT REGARDING CONSOLIDA-
TION OF CREDIT RATING AGENCIES. 
(a) STUDY REQUIRED.—The Comptroller General of 
the United States shall conduct a study— 
(1) to identify— 
(A) the factors that have led to the consoli-
dation of credit rating agencies; 
(B) the present and future impact of the 
condition described in subparagraph (A) on the 
securities markets, both domestic and inter-
national; and 
(C) solutions to any problems identified 
under subparagraph (B), including ways to in-
crease competition and the number of firms ca-
pable of providing credit rating services to large 
national and multinational business organiza-
tions that are subject to the securities laws; 
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(2) of the problems, if any, faced by business or-
ganizations that have resulted from limited competi-
tion among credit rating agencies, including— 
(A) higher costs; 
(B) lower quality of services; 
(C) anti-competitive practices; 
(D) impairment of independence; and 
(E) lack of choice; and 
(3) whether and to what extent Federal or State 
regulations impede competition among credit rating 
agencies. 
(b) CONSULTATION.—In planning and conducting the 
study under this section, the Comptroller General shall con-
sult with— 
(1) the Securities and Exchange Commission; 
(2) the Department of Justice; and 
(3) any other public or private sector organiza-
tion that the Comptroller General considers appro-
priate. 
(c) REPORT REQUIRED.—Not later than 180 days 
after the date of enactment of this Act, the Comptroller Gen-
eral shall submit a report on the results of the study re-
quired by this section to the Committee on Banking, Hous-
ing, and Urban Affairs of the Senate and the Committee 
on Financial Services of the House of Representatives. 
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