SEC Okays Seven Nationally Recognized Statistical Ratings Organizations. We learned from Investment News yesterday that the Securities & Exchange Commission granted registrations for 7 ratings agencies, or NRSROs. In addition to the "Big 3" -- Standard & Poor's, Moody's and Fitch -- the Commission now allows ratings from A.M. Best, Canadian DBRS, Japan Credit Rating Agency, and Japan's Rating and Investment Information. The expansion holds particular significance for money market funds since Rule 2a-7 of the Investment Company Act of 1940 requires "First Tier" holdings to have at least two top ratings. Money funds may only invest in securities with one of the top two short-term ratings, and must limit investments to 5% for First Tier and 1% for Second Tier (with a 5% total in Second Tier). An expansion in the number of agencies makes the "First Tier" hurdle slightly more obtainable.

Email This Article




Use a comma or a semicolon to separate

captcha image