The Securities and Exchange Commission will consider proposing new rules for nationally recognized credit rating agencies at a meeting that is currently scheduled to be held on June 11, Christopher Cox said Monday at an International Organization of Securities Commissions' conference in Paris.

In a related matter, SEC officials Friday asked the three major credit rating agencies - Moody's Investors Service, Standard & Poor's, and Fitch Ratings - to describe any errors they have found in their ratings of structured investment vehicles over the past four years, and what they did to correct those errors, a commission spokesman said.

SEC officials would not comment on the new rating agency rules yesterday. But Cox told representatives of the National Community Reinvestment Coalition in a recent letter that the commission may consider rules that would require the rating agencies to make more detailed disclosures regarding past ratings, in a format that would improve the comparability of track records and promote competitive assessments of the accuracy of the agencies' past ratings.

Cox said also that the new proposed rules may: enhance investor understanding of the important differences between ratings for municipal, corporate, and structured debt instruments; regulate and limit conflicts of interest; reduce regulatory reliance on ratings per se, as opposed to the underlying criteria that the ratings are thought to represent; and disclose the role of third party due diligence in assigning ratings.

The SEC request for information about errors from the rating agencies comes after Moody's wrongly assigned triple-A ratings to billions of dollars of complex financial products because of a computer coding error and then did not correct the ratings when the error was discovered.

The Financial Times, which uncovered the glitch through an investigation, said internal Moody's documents indicated the incorrect ratings of the "constant proportion debt obligations," a type of credit derivatives, should have been four notches lower.

Moody's has hired the law firm of Sullivan & Cromwell to investigate the matter.


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