On September 26, 2018, the US Securities and Exchange Commission (SEC) proposed a permanent exemption from Rule 17g-5 (which causes an arranger of an asset-backed security to provide a nationally recognized statistical rating organization (NRSRO) that is not hired by the arranger with the same information that is provided to hired NRSROs) with respect to credit ratings if (i) the issuer of the security or money market instrument referred to in the rule is not a US person; and (ii) a NRSRO has a reasonable basis to conclude that all offers and sales of such security or money market instrument by any issuer, sponsor or underwriter linked to such security or money market instrument will occur outside the United States. The SEC also proposed conforming amendments to similar exemptions in rules regarding reporting of due diligence services, Rule 17g-7(a) and Rule 15Ga-2.
If adopted, the proposed rule effectively would make permanent the temporary conditional relief that has been provided by the SEC.
Comments are due within 30 days of publication in the Federal Register.
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