New rules for rating agencies in the US will add uncertainty
to deals, increase costs for issuers and threaten the revival
of structured finance.
The Securities and Exchange Commission's (SEC) amended rule
17g-5 came into force on June 2, and requires rating agencies
to ask structured finance issuers in the US to disclose
information that can be used to rate deals.
The idea is to give smaller rating agencies the opportunity
to rate deals themselves, create more competition and foster
more accountability from the deal's original rating agency.
But issuers don't know how...