1068 
this title for money damages against a nationally recog-
nized statistical rating organization, it shall be sufficient 
for purposes of pleading any required state of mind for 
purposes of such action that the complaint shall state with 
particularity facts giving rise to a strong inference that 
the nationally recognized statistical rating organization 
knowingly or recklessly violated the securities laws’’. 
(b) PLEADING STANDARD.—Section 15E(m) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o-7(m)) 
amended to read as follows: 
‘‘(m) APPLICATION OF ENFORCEMENT PROVISIONS; 
PLEADING STANDARD IN PRIVATE RIGHTS OF ACTION.— 
Statements made by nationally recognized statistical rat-
ing organizations shall not be deemed forward looking 
statements for purposes of section 21E. In any private 
right of action commenced against a nationally recognized 
statistical rating organization under this title, the same 
pleading standards with respect to knowledge and reck-
lessness shall apply to the nationally recognized statistical 
rating organization as would apply to any other person 
in the same or a similar private right of action against 
such person.’’. 
SEC. 6004. ISSUER DISCLOSURE OF PRELIMINARY RATINGS. 
The Securities and Exchange Commission shall adopt 
rules under authority of the Securities Act of 1933 (15 
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U.S.C. 77a, et seq.) to require issuers to disclose prelimi-
nary credit ratings received from nationally recognized 
statistical rating agencies on structured products and all 
forms of corporate debt. 
SEC. 6005. CHANGE TO DESIGNATION. 
The Securities Act of 1933 and the Securities Ex-
change Act of 1934 are each amended by striking ‘‘nation-
ally recognized statistical rating’’ each place it appears 
and inserting ‘‘nationally registered statistical rating’’. 
SEC. 6006. TIMELINE FOR REGULATIONS. 
Unless otherwise specified in this subtitle, the Securi-
ties and Exchange Commission shall adopt rules and regu-
lations, as required by the amendments made by this sub-
title, not later than 365 days after the date of enactment. 
SEC. 6007. ELIMINATION OF EXEMPTION FROM FAIR DIS-
CLOSURE RULE. 
Not later than 90 days after the date of enactment 
of this subtitle, the Securities Exchange Commission shall 
revise Regulation FD (17 C.F.R. 243.100) to remove from 
such regulation the exemption for entities whose primary 
business is the issuance of credit ratings (17 C.F.R. 
243.100(b)(2)(iii)). 
SEC. 6008. ADVISORY BOARD. 
(a) ESTABLISHMENT.—Not later than 90 days after 
the date of the enactment of this subtitle, the Securities 
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and Exchange Commission shall establish an advisory 
board to be known as the Credit Ratings Agency Advisory 
Board (in this section referred to as ‘‘the Board’’). 
(b) APPOINTMENT AND TERMS OF SERVICE.—The 
Board shall consist of 7 members appointed by the Com-
mission, no more than 2 of whom may be former employ-
ees of a credit rating agency. Members of the Board shall 
be prominent individuals of integrity and reputation who 
have a demonstrated commitment to the interests of inves-
tors and the public, and an understanding of the role that 
credit ratings play to a broad range of investors. Terms 
of service shall be staggered as determined by the Com-
mission. 
(c) DUTIES.—The Board shall— 
(1) advise the Commission concerning the rules 
and regulations required by the amendments made 
by this subtitle; 
(2) ensure that the Commission properly and 
fully executes its oversight functions and responsibil-
ities with the respect to nationally recognized statis-
tical rating organizations and individual partici-
pants; and 
(3) issue an annual report to Congress detailing 
its work and recommending any additional Congres-
sional actions necessary to aid the Commission and 
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such additional reports from time to time as appro-
priate when it feels that the Commission is not prop-
erly executing its oversight functions. 
SEC. 6009. REMOVAL OF STATUTORY REFERENCES TO 
CREDIT RATINGS. 
(a) FEDERAL DEPOSIT INSURANCE ACT.—The Fed-
eral Deposit Insurance Act (12 U.S.C. 1811 et seq.) is 
amended— 
(1) in section 28(d)— 
(A) in the subsection heading, by striking 
‘‘NOT OF INVESTMENT GRADE’’; 
(B) in paragraph (1), by striking ‘‘not of 
investment grade’’ and inserting ‘‘that does not 
meet standards of credit-worthiness as estab-
lished by the Corporation’’; 
(C) in paragraph (2), by striking ‘‘not of 
investment grade’’; 
(D) by striking paragraph (3) and redesig-
nating paragraph (4) as paragraph (3); and 
(E) in paragraph (3) (as so redesig-
nated)— 
(i) by striking subparagraph (A) and 
redesignating subparagraphs (B) and (C) 
as subparagraphs (A) and (B), respec-
tively; and 
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(ii) in subparagraph (B) (as so redes-
ignated), by striking ‘‘not of investment 
grade’’ and inserting ‘‘that does not meet 
standards of credit-worthiness as estab-
lished by the Corporation’’; 
(2) in section 28(e)— 
(A) in the subsection heading, by striking 
‘‘NOT OF INVESTMENT GRADE’’; 
(B) in paragraph (1), by striking ‘‘not of 
investment grade’’ and inserting ‘‘that does not 
meet standards of credit-worthiness as estab-
lished by the Corporation’’; and 
(C) in paragraphs (2) and (3), by striking 
‘‘not of investment grade’’ each place that it ap-
pears and inserting ‘‘that does not meet stand-
ards of credit-worthiness established by the 
Corporation’’; and 
(3) in section 7(b)(1)(E)(i), by striking ‘‘credit 
rating entities, and other private economic’’ and in-
sert ‘‘private economic, credit,’’. 
(b) FEDERAL HOUSING ENTERPRISES FINANCIAL 
SAFETY AND SOUNDNESS ACT OF 1992.—Section 1319 
of the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 (12 U.S.C. 4519) is amended— 
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(1) in the section heading, by striking ‘‘BY 
RATING ORGANIZATION’’; and 
(2) by striking ‘‘that is a nationally recognized 
statistical rating organization, as such term is de-
fined in section 3(a) of the Securities Exchange Act 
of 1934,’’. 
(c) INVESTMENT COMPANY ACT OF 1940.—Section 
6(a)(5)(A)(iv)(I) Investment Company Act of 1940 (15 
U.S.C. 80a-6(a)(5)(A)(iv)(I)) is amended by striking ‘‘is 
rated investment grade by not less than 1 nationally recog-
nized statistical rating organization’’ and inserting ‘‘meets 
such standards of credit-worthiness that the Commission 
shall adopt’’. 
(d) REVISED STATUTES.—Section 5136A of title 
LXII of the Revised Statutes of the United States (12 
U.S.C. 24a) is amended— 
(1) in subsection (a)(2)(E), by striking ‘‘any 
applicable rating’’ and inserting ‘‘standards of cred-
it-worthiness established by the Comptroller of the 
Currency’’; 
(2) in the heading for subsection (a)(3) by 
striking ‘‘RATING OR COMPARABLE REQUIREMENT’’ 
and inserting ‘‘REQUIREMENT’’; 
(3) subsection (a)(3), by amending subpara-
graph (A) to read as follows: 
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