About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

More Ratings Regulations Progress in US with House Financial Services Committee Vote

Subscribe to our newsletter

This week more progress has been achieved in the US with regards to the regulatory crackdown on credit ratings agencies: the House Financial Services Committee has thrown its support behind the bill to increase oversight of this corner of the market. The bill, which was first proposed by Paul Kanjorski, chairman of the House subcommittee on capital markets, goes one step further than the Obama administration’s proposed reforms for the sector by making these agencies collectively liable for inaccuracies in their ratings.

The aim of the new regulation is to try to reduce the conflicts of interests at ratings firms and make it easier to sue them when they provide investors with inaccurate findings. It would require these agencies to be liable under securities law for inaccuracies in their ratings, which would mean that they would be regulated as “experts” under securities law, in the same way as auditors, who can currently be more easily sued over their findings.

The bill would also require these firms to provide more information to the market about how they have been paid for their ratings services and would grant the Securities and Exchange Commission (SEC) more power to oversee their practices. Moreover, the ratings firms would need to appoint more independent members to their boards of directors in order to reduce the chances of conflicts of interests occurring.

The support of the House committee brings the proposals one step further to enactment, but they still have a long way to go as the Senate is moving on a far slower schedule than the House.

Unsurprisingly, the ratings agencies are not keen to face a potential barrage of lawsuits and have been vigorously lobbying for these proposals to be dropped. They have employed the tactic of suggesting that this development would push up costs for end investors for their services in the long run.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: How to simplify and modernize data architecture to unleash data value and innovation

The data needs of financial institutions are growing at pace as new formats and greater volumes of information are integrated into their systems. With this has come greater complexity in managing and governing that data, amplifying pain points along data pipelines. In response, innovative new streamlined and flexible architectures have emerged that can absorb and...

BLOG

Snowflake Bets it can Bring the Promise of AI to Wary Organisations

Snowflake has rooted its offerings more deeply in artificial intelligence, betting that its data cloud platform can deliver the promise of the technology at a time when many organisations are reappraising their approach to AI implementation. Among a flurry of new service announcements made at the end of last year, Snowflake unveiled plans to launch...

EVENT

Data Management Summit London

Now in its 16th year, the Data Management Summit (DMS) in London brings together the European capital markets enterprise data management community, to explore how data strategy is evolving to drive business outcomes and speed to market in changing times.

GUIDE

AI in Capital Markets: Practical Insight for a Transforming Industry – Free Handbook

AI is no longer on the horizon – it’s embedded in the infrastructure of modern capital markets. But separating real impact from inflated promises requires a grounded, practical understanding. The AI in Capital Markets Handbook 2025 provides exactly that. Designed for data-driven professionals across the trade life-cycle, compliance, infrastructure, and strategy, this handbook goes beyond...