Thursday 29 May 2008

IOSCO: revised code of conduct for credit rating agencies

The International Organization of Securities Commissions (IOSCO) has published a revised Code of Conduct Fundamentals for Credit Rating Agencies. The chairman of IOSCO's Technical Committee, Michel Prada, has observed:
IOSCO’s Code of Conduct aims to improve investor protection, improve the fairness, efficiency and transparency of securities markets and to reduce systemic risk. We have engaged in a frank and constructive dialogue with the CRA industry, issuers and investors and have taken a broad range of views into account in finalizing the changes to our code. I believe that these changes to the Code of Conduct will help to address a number of issues that have arisen as a result of the current credit crisis regarding how the credit ratings for structured finance products are developed by credit ratings agencies and relied upon by issuers and investors."

The revised Code is included as part of the Technical Committee's report and an overview of the changes is available in this press release. For newspaper comment, see here.

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