Getting around the Franken Amendment

Author: | Published: 4 Nov 2010

As government agencies develop regulations on credit rating agencies (CRAs) in the Dodd-Frank Act, little is being said about the controversial Franken Amendment, which would create a board for assigning CRAs to the financial instruments they rate.

Though relegated to a study in the final legislation, if the US Securities and Exchange Commission (SEC) has not found a suitable alternate means of assigning CRAs to financial instruments within two years, regulators are required to implement the Franken proposal.

“The language in Dodd-Frank really puts it on ice a bit, but it doesn't kill it,” said Skadden Arps Slate Meagher...