As Required by Section 6 of the Credit Rating Agency Reform Act of 2006

Staff Report
FEBRUARY | 2023
NATIONALLY RECOGNIZED  
STATISTICAL RATING ORGANIZATIONS
ON
Office of Credit Ratings
U.S. Securities and Exchange Commission
As Required by Section 6 of the Credit Rating Agency Reform Act of 2006 
and Section 15E(p)(3)(C) of the Securities Exchange Act of 1934

02    |  OFFICE OF CREDIT RATINGS 
This is a report of the Staff of the U.S. Securities and Exchange Commission. Staff reports, Investor Bulletins, and 
other staff documents represent the views of Commission staff and are not a rule, regulation, or statement of the 
Commission. The Commission has neither approved nor disapproved the content of these documents and, like all 
staff statements, they have no legal force or effect, do not alter or amend applicable law, and create no new or 
additional obligations for any person. The Commission has expressed no view regarding the analysis, findings, or 
conclusions contained herein.

 STAFF REPORT    |  i
CONTENTS
CHARTS  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  ii
I. INTRODUCTION  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  1
II. STATUS OF REGISTRANTS AND APPLICANTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
III. EXAMINATIONS AND MONITORING  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
A.   Overview  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
B. Risk Assessment  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  7
C.    Monitoring  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  9
D. 2022 Section 15E(p)(3) Examinations  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  10
1.  Overview
  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  10
2.  Terms Used in This Report.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  10
3.   Summary of Essential Findings and Responses to Material Regulatory Deficiencies  . . . .11
4.  Responses to Recommendations from the 2021 Section 15E Examinations
  .  .  .  .  .  .  .  .  .  .17
IV. STATE OF COMPETITION, TRANSPARENCY, AND CONFLICTS OF INTEREST  . . . . . . . . . . 19
A.   Competition  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  19
1.  Select NRSRO Statistics
  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  19
2.  Market Share Observations in the Asset-Backed Securities Rating Category
  .  .  .  .  .  .  .  .  29
3.  Barriers to Entry
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
B.    Transparency  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  37
C. Conflicts of Interest  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
V. ACTIVITIES RELATING TO NRSROs  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  41
A. Commission Orders and Releases  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  41
B. Court Judgment  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  42
C. Staff Publication  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  42
VI. APPENDIX:  SUMMARY OF STATUTORY FRAMEWORK AND RULES  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  43

ii    |  OFFICE OF CREDIT RATINGS 
CHARTS
Chart 1. Table of NRSROs  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Chart 2.  Number of Outstanding Credit Ratings as of December 31, 2021 by  
Rating Category
  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .21
Chart 3.  Percentage by Rating Category of Each NRSRO’s Outstanding Credit  
Ratings of the Total Outstanding Credit Ratings of all NRSROs as of  
December 31, 2021
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Chart 4.      Breakdown of Ratings Reported Outstanding by Rating Category as of  
December 31, 2021
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Chart 5.      Breakdown of Ratings Reported Outstanding by NRSRO  
as of December 31, 2021
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Chart 6.  Breakdown of Non-Government Securities Ratings Reported  
Outstanding by NRSRO as of December 31, 2021
  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  23
Chart 7.  Breakdown of Government Securities Ratings Reported  
Outstanding on December 31, 2021
  . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Chart 8.  Total Non-Government Ratings Issued by All NRSROs as of  
December 31, 2021
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Chart 9.  Total Non-Government Ratings Issued by Medium and Small  
NRSROs as of December 31, 2021
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Chart 10.     Total ABS Ratings Issued by All NRSROs as of December 31, 2021  .  .  .  .  .  .  .  .  .  26
Chart 11. NRSRO Credit Analysts and Credit Analyst Supervisors  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  26
Chart 12.     NRSRO Fiscal Year Revenue as a Percentage of Aggregate  
Reported Revenue
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Chart 13.     Rating Agency Market Shares for Total Non-Agency U.S. CMBS  
Issued in 2020, 2021, and First Half of 2022
  . . . . . . . . . . . . . . . . . . . . . .30
Chart 14.     Rating Agency Market Shares for U.S. Conduit CMBS Issued in 2020,  
2021, and First Half of 2022
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Chart 15.     Rating Agency Market Shares for U.S. Single-Borrower CMBS  
Issued in 2020, 2021, and First Half of 2022
  . . . . . . . . . . . . . . . . . . . . . . .31
Chart 16.     Rating Agency Market Shares for Agency CMBS Issued in 2020, 2021, and  
First Half of 2022
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Chart 17.     Rating Agency Market Shares for U.S. ABS Issued in 2020, 2021, and  
First Half of 2022
  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  32
Chart 18.     Rating Agency Market Shares for U.S. MBS Issued in 2020, 2021, and  
First Half of 2022
  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  33
Chart 19.     Rating Agency Market Shares for U.S. CLOs Issued in 2020, 2021, and  
First Half of 2022
  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  34

 STAFF REPORT    |  1
I.	INTRODUCTION
1 Pub. L. No. 109-291, 120 Stat. 1327 (Sept. 29, 2006). 
2 Unless otherwise noted, all section and rule references in this report are to the Exchange Act and rules under the Exchange 
Act.
3 See “Reports and Studies” section of the OCR webpage, available at https://www.sec.gov/ocr/ocr-reports-and-studies.html. 
Prior to 2021, OCR published two separate annual reports: an Annual Report to Congress pursuant to Section 6 of the 
Rating Agency Act and a Summary Examination Report pursuant to Section 15E(p)(3)(C) of the Exchange Act. The 2021 
Staff Report on NRSROs was the first to present in a single report the requirements under both Section 6 of the Rating 
Agency Act and Section 15E(p)(3) of the Exchange Act. 
T
he Staff of the U.S. Securities and Exchange 
Commission (Commission) provides this 
Report regarding nationally recognized statis-
tical rating organizations (NRSROs) pursuant 
to Section 6 of the Credit Rating Agency Reform 
Act of 2006 (Rating Agency Act)
1
 and Section 
15E(p)(3)(C) of the Securities Exchange Act of 
1934 (Exchange Act).
2
Section 6 of the Rating Agency Act requires the 
Commission to submit an annual report to the 
Committee on Banking, Housing, and Urban 
Affairs of the U.S. Senate and the Committee on 
Financial Services of the U.S. House of Representa-
tives that, with respect to the year to which the 
report relates:
 ■Identifies applicants for registration as NRSROs 
under Section 15E;
 ■Specifies the number of, and actions taken on, 
such applications; and
 ■Specifies the views of the Commission on the 
state of competition, transparency, and conflicts 
of interest among NRSROs. 
Section 15E(p)(3)(C) requires the Commission 
to make available to the public an annual report 
summarizing: 
 ■Essential findings of all Section 15E 
examinations, as deemed appropriate by the 
Commission;
 ■NRSROs’ responses to any material regulatory 
deficiencies identified by the Commission; and
 ■Whether the NRSROs have appropriately 
addressed the recommendations of the 
Commission contained in previous annual 
reports. 
This Report addresses the items specified in 
Section 6 of the Rating Agency Act and Section 
15E(p)(3). This is a report of the Staff and, as such, 
reflects solely the Staff’s views. 
Information regarding the topics covered in this 
Report with respect to prior periods can be found 
on the Office of Credit Ratings (OCR) page of the 
Commission’s website.
3
.

2    |  OFFICE OF CREDIT RATINGS 

 STAFF REPORT    |  3
II. STATUS OF REGISTRANTS  
AND APPLICANTS
4 “Asset-backed securities” has the meaning set forth in 17 CFR 229.1101(c), as in effect on September 29, 2006 (the date of 
enactment of the Rating Agency Act).
5 Section 3(a)(62)(A).
6 Section 15E(a) sets out registration procedures for a credit rating agency to voluntarily apply to be registered with the 
Commission as an NRSRO. 
7 See each NRSRO’s current Form NRSRO for any updates to this information. Each NRSRO must file with the 
Commission on EDGAR a Form NRSRO for annual certification and registration updates pursuant to paragraphs (e) 
and (f) of Rule 17g-1, and each NRSRO must make its current Form NRSRO publicly and freely available on its website 
pursuant to paragraph (i) of Rule 17g-1. Form NRSRO filings are available on the EDGAR system at https://www.sec.
gov/edgar/searchedgar/companysearch.html. Links to each NRSRO’s website can be found under the “Current NRSROs” 
section of the OCR webpage, available at https://www.sec.gov/ocr/ocr-current-nrsros.html. 
I
n 2007, the Commission began granting registra-
tions to credit rating agencies that applied to be 
registered as an NRSRO. Section 3(a)(62) defines 
a “nationally recognized statistical rating organi-
zation” as a credit rating agency that is registered 
under Section 15E and issues credit ratings certified 
by qualified institutional buyers, in accordance with 
Section 15E(a)(1)(B)(ix), with respect to: 
(i) Financial institutions, brokers, or dealers; 
(ii) Insurance companies; 
(iii) Corporate issuers; 
(iv) Issuers of asset-backed securities;
4
 
(v) Issuers of government securities, municipal 
securities, or securities issued by a foreign 
government; or 
(vi) A combination of one or more categories of 
obligors described in any of clauses (i) through 
(v) above.
5
As of December 31, 2022, there were ten credit 
rating agencies registered as NRSROs.
6
 Chart 
1 below lists each NRSRO registered with the 
Commission as of such date, the categories of 
credit ratings described in clauses (i) through (v) of 
Section 3(a)(62)(A) in which each NRSRO is regis-
tered, and the location of each NRSRO’s principal 
office.
7

4    |  OFFICE OF CREDIT RATINGS 
Chart 1. Table of NRSROs
NRSRO
Categories of Credit 
RatingsPrincipal Office
A.M. Best Rating Services, Inc. (AMB)
(ii), (iii), and (iv)U.S.
DBRS, Inc. (DBRS)
(i) through (v)U.S.
Demotech, Inc. (Demotech)
(ii)U.S.
Egan-Jones Ratings Company (EJR)
(i) through (iii)U.S.
Fitch Ratings, Inc. (Fitch)
(i) through (v)U.S.
HR Ratings de México, S.A. de C.V. (HR)
(i), (iii), and (v)Mexico
Japan Credit Rating Agency, Ltd. (JCR)
(i), (ii), (iii), and (v)Japan
Kroll Bond Rating Agency, LLC (KBRA)
(i) through (v)U.S.
Moody’s Investors Service, Inc. (Moody’s) 
(i) through (v)U.S.
S&P Global Ratings (S&P)
(i) through (v)U.S.
8 Collectively, the three large NRSROs account for approximately 93.2% of the aggregate revenue reported by all 
NRSROs for the 2021 fiscal year in accordance with Rule 17g-3(a)(3); the three medium NRSROs collectively account 
for approximately 5.6% of such aggregate revenue; and the three small NRSROs collectively account for approximately 
1.1% of such aggregate revenue. See infra Section IV.A.1.c, Chart 12. Based on information provided in its application 
for registration, Demotech would be characterized as a small NRSRO for purposes of this Report. However, because 
Demotech was not registered as an NRSRO for the entirety of calendar year 2022, it is generally not discussed in the 
portions of this Report that use this term. References to small NRSROs in this Report do not include Demotech.
9 Section 15E(a)(2)(C).
10 See Section 15E(a) and Rule 17g-1; see also Form NRSRO, available at https://www.sec.gov/about/forms/formnrsro.pdf. 
In addition, Section 15E(b) requires NRSROs to promptly amend Form NRSRO if any information or document provided 
therein becomes materially inaccurate.
Solely for purposes of this Report: Fitch, Moody’s, 
and S&P are categorized as “large NRSROs;” 
AMB, DBRS, and KBRA are categorized as 
“medium NRSROs;” and EJR, HR, and JCR are 
categorized as “small NRSROs.” These categoriza-
tions are based on revenue.
8
In accordance with the Exchange Act, the 
Commission grants registration as an NRSRO 
if it finds the requirements of Section 15E are 
satisfied and so long as it does not find: (1) that 
the applicant does not have adequate financial and 
managerial resources to produce credit ratings with 
integrity, to materially comply with its procedures 
and methodologies for determining credit ratings 
disclosed on Form NRSRO, and to materially 
comply with provisions of Section 15E related 
to the prevention of the misuse of non-public 
information, management of conflicts of interest, 
prohibited conduct, and designation of a 
compliance officer; or (2) that if the applicant were 
to be registered, its registration would be subject to 
suspension or revocation.
9
Applications for initial registration by a credit 
rating agency and for registration by a current 
NRSRO in additional rating categories are filed 
on Form NRSRO.
10
 A credit rating agency may 
choose not to apply for registration as an NRSRO, 
in which case it may issue credit ratings as a credit 

 STAFF REPORT    |  5
rating agency, but it may not issue credit ratings as 
an NRSRO.
11
 In addition, a credit rating agency 
may choose to apply for registration as an NRSRO 
in one or more rating categories.
12
 As noted in 
Chart 1 above, certain NRSROs are registered in all 
of the rating categories, and certain NRSROs are 
registered in fewer than all of the rating categories. 
In calendar year 2022, one application for initial 
registration as an NRSRO in the insurance 
companies ratings class was filed with the 
Commission by Demotech. The Commission 
granted Demotech’s registration as an NRSRO in 
11 Section 3(a)(60) defines the term “credit rating,” Section 3(a)(61) defines the term “credit rating agency,” and Section 
3(a)(62) defines the term “nationally recognized statistical rating organization.” For additional information about credit 
ratings, see Updated Investor Bulletin: The ABCs of Credit Ratings (Oct. 12, 2017), available at https://www.sec.gov/oiea/
investor-alerts-and-bulletins/ib_creditratings.
12
 See Section 3(a)(62)(A)(i) – (vi).
13
 See Order Granting Registration of Demotech, Inc. as a Nationally Recognized Statistical Rating Organization, SEC Rel. 
No. 34-95243 (July 11, 2022), available at: https://www.sec.gov/rules/other/2022/34-95243.pdf.
14
 See Section 15E(c)(2).
such ratings class on July 11, 2022.
13
 No applica-
tions for registration by a current NRSRO in 
additional rating categories were filed with the 
Commission in calendar year 2022.
The SEC oversees and, as discussed below, 
examines NRSROs. The Commission is prohibited 
by statute, however, from regulating the substance 
of credit ratings or the procedures and method-
ologies the NRSROs use to determine credit 
ratings.
14
 Methodologies include, among other 
things, the quantitative and qualitative models used 
to determine credit ratings.



 STAFF REPORT    |  7
III. EXAMINATIONS AND MONITORING
15 Pursuant to Section 17, the Staff can conduct examinations of NRSROs that supplement the Section 15E examinations.
A. OVERVIEW
I
n accordance with Section 15E(p)(3), the Staff 
conducts examinations of each NRSRO at least 
annually.
15
 Generally, the purpose of these annual 
examinations is to promote compliance with appli-
cable federal securities laws and rules by identifying 
potential instances of non-compliance by NRSROs 
with their statutory and regulatory obligations and 
recommending remedial action. Information obtained 
during an examination can also inform Staff of 
noteworthy industry developments. 
To facilitate and promote compliance by 
NRSROs with their statutory and regulatory 
obligations, the Staff sends each NRSRO an 
examination summary letter that discusses its 
findings related to that NRSRO and recommends 
remedial measures. When appropriate, Staff may 
refer findings to the Commission’s Division of 
Enforcement for investigation.
Section 15E(p)(3)(B) provides that each NRSRO 
examination (Section 15E examinations) shall 
include a review conducted of the following eight 
topic areas (Section 15E Review Areas): 
 ■Whether the NRSRO conducts business in 
accordance with its policies, procedures, and 
rating methodologies; 
 ■Management of conflicts of interest by the 
NRSRO; 
 ■Implementation of ethics policies by the 
NRSRO;
 ■Internal supervisory controls of the NRSRO;
 ■Governance of the NRSRO; 
 ■Activities of the Designated Compliance Officer 
(DCO) of the NRSRO; 
 ■Processing of complaints by the NRSRO; and 
 ■Policies of the NRSRO governing the 
post-employment activities of its former staff.
This Section III discusses the annual examinations 
pursuant to Section 15E(p)(3) that commenced in 
late 2021 and concluded in late September 2022 
(2022 Section 15E examinations).
B. RISK ASSESSMENT
The 2022 Section 15E examinations encom-
passed all of the statutorily required Section 15E 
Review Areas. The Staff also determined areas of 
emphasis and issues of focus for each examination 
based upon an NRSRO-specific risk assessment 
performed by the Staff, while also considering how 
to limit the amount of personal data collected in 
the examination process. The NRSRO-specific 
risk assessments considered a number of factors, 
including, but not limited to: 
 ■NRSROs’ rating activities and operations; 
 ■Staff’s findings, recommendations, and other 
observations from prior examinations; 

8    |  OFFICE OF CREDIT RATINGS 
 ■Impact of a potential or actual internal control 
or compliance failure by the NRSRO; 
 ■Recent industry developments affecting 
NRSROs and the asset classes in which the 
NRSRO is registered; 
 ■NRSROs’ filings with the Commission and 
public disclosures; 
 ■NRSROs’ self-identified weaknesses;
 ■Relevant Tips, Complaints, and Referrals 
(TCRs) received by the Commission; and
 ■Risks identified in a risk assessment process.
Through its risk assessment process in connection 
with the 2022 Section 15E examinations, which 
focuses primarily on new and emerging issues, 
OCR staff identified a number of potential risks for 
consideration in the NRSRO-specific risk assess-
ments and incorporation into the examinations, as 
appropriate. The risks identified include:
 ■Surveillance Practices in Times of Stress: 
Rating surveillance processes came under stress 
during COVID-19 due to rapidly changing 
information and declining performance in some 
sectors, which may have required additional 
surveillance reviews. The Staff identified as 
potential risks: the possibility that increased 
analyst workloads could result in failures to 
adhere to applicable surveillance policies and 
procedures; and the possibility that NRSROs 
may have adjusted assumptions or streamlined 
surveillance processes without sufficient 
controls to ensure appropriate documentation 
and disclosure.
 ■Impact of Pandemic on Commercial Real 
Estate: After being adversely affected by 
COVID-19, the single borrower CMBS sector 
experienced an uneven recovery during the 
first half of 2021 as compared to the first half 
16 Examples of such ESG products and services include: evaluations of the environmental benefits of a project financed with 
the proceeds of a “green” bond issuance; ESG scores based on the expected impact of ESG factors on a company’s growth, 
profitability, capital efficiency, and risk exposure; and assessments of a company’s risk from climate-related scenarios.
of 2020, with properties such as lodging and 
retail lagging. The Staff identified potential 
risks relating to commercial real estate ratings 
with significant exposure to sectors negatively 
impacted by COVID-19, and potential 
non-adherence to methodologies and rating 
processes with respect to: (1) qualitative 
adjustments made to model implied ratings, 
model implied subordination levels, and inputs 
to models used in the ratings process; (2) 
property valuations; and, (3) default frequency 
and severity assumptions or projections.
 ■Changing Methods of Communication/
Technology: The Staff identified as a potential 
risk, given the increased use of text messaging 
applications as a means of communication, 
an increased likelihood that business 
communications are conducted through 
unapproved means and/or that appropriate 
records are not retained.
 ■Securities Ownership: In light of specific findings 
and recommendations in the 2021 Section 15E 
examinations, the Staff identified as a potential 
risk for consideration by all examination teams 
that NRSROs may have weaknesses in their 
policies and procedures to manage conflicts of 
interest or prevent inappropriate use of material 
non-public information with respect to securities 
ownership by employees.
 ■ESG Factors and Products: NRSROs have 
developed ESG methodologies applicable to 
the determination of credit ratings. In addition, 
NRSROs and their affiliates continue to develop 
and offer an increasing number of ESG-related 
products and services that are not credit ratings 
and therefore are not directly regulated by the 
Commission.
16
 Potential risks identified by the 
Staff include the possibility that the marketing 
and development of stand-alone ESG products 

 STAFF REPORT    |  9
may result in conflicts of interest that could 
affect credit ratings.
 ■Ratings on Firms Based in China: The Staff 
identified a number of recent developments in 
China that could potentially have significant 
economic consequences. Such developments 
include: a heightened level of concern regarding 
the creditworthiness of large Chinese real estate 
development firms; regional power reductions 
and rationing resulting from fuel shortages, high 
demand, and regulatory imperatives, leading to 
production slowdowns; and substantial losses 
reported at a majority state-owned financial 
company focused on debt management. The 
Staff identified concerns that these developments 
potentially could result in adverse effects on the 
ratings of firms based in China.
C. MONITORING
To help inform its risk assessment process 
and examination program, the Staff in 2022 
monitored credit rating activity, industry trends 
and developments, NRSRO operational develop-
ments and plans, and relevant capital market, 
economic, and financial news and events. The 
Staff’s monitoring activities consisted primarily of 
communications with NRSROs and users of credit 
ratings and reviewing sources such as NRSRO 
publications, news reports, trade publications, 
academic papers, industry conference information, 
and government reports.
For example, the Staff’s discussions covered 
the scope and nature of rating actions that the 
NRSROs attributed to the Russia-Ukraine conflict. 
This included numerous rating actions on entities 
17 On March 15, 2022, the European Union (EU) announced a ban, effective April 15, 2022, on the provision of credit 
rating services by EU credit rating agencies, or the provision of access to any subscription services in relation to credit 
rating activities by EU credit rating agencies, to any Russian national or natural person residing in Russia or any legal 
person, entity or body established in Russia. See Ukraine: EU agrees fourth package of restrictive measures against Russia, 
European Commission, March 15, 2022, available at https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1761.
in Russia, Ukraine, and other countries affected 
by the conflict due to rising prices of commodities 
and energy, disruption of business activity within 
Russia and Ukraine, and increased cyber and other 
security risks. It also included the withdrawal of 
ratings subject to sanctions.
17
 In addition, NRSROs 
reported suspending operations in Russia and 
transferring analytical responsibilities, rating 
information, and network access to offices outside 
of the country.
Another topic of the Staff’s monitoring efforts 
was consideration of the effect of rising interest 
rates and inflation. These developments led some 
NRSROs to lower their global and U.S. economic 
growth forecasts and consider the impact on their 
credit ratings.
The Staff’s monitoring efforts also covered NRSRO 
rating activity related to decentralized finance 
(DeFi), such as distributed ledger technologies, 
crypto assets, and smart contracts. This rating 
activity, although limited, included assessments of 
entities directly engaged in DeFi or crypto assets, 
evaluation of crypto asset holdings by rated entities, 
and ratings of structured finance transactions 
utilizing blockchain.
In 2022, the Staff also continued to participate in 
meetings that involved rating agency regulators 
globally, including those of the supervisory colleges 
that were formed for the largest internationally 
active credit rating agencies. The supervisory 
colleges were formed to enhance communication 
among credit rating agency regulators globally with 
respect to examinations of the relevant credit rating 

10    |  OFFICE OF CREDIT RATINGS 
agencies.
18
 Each college engaged in periodic discus-
sions during 2022 regarding supervisory activities 
related to the credit rating agencies. The Staff also 
conducted additional discussions with foreign 
regulators, as appropriate. 
D.  2022 SECTION 15E(p)(3) 
EXAMINATIONS
1. Overview
The 2022 Section 15E examinations generally 
focused on the NRSROs’ activities for the period 
covering January 1, 2021 through December 31, 
2021 (the Review Period).
19
 The examinations also 
reviewed certain activities or credit rating actions 
from outside the Review Period, as appropriate.
20
 
The 2022 Section 15E examinations included 
a review of the Section 15E Review Areas and 
examination of each NRSRO’s compliance with 
Section 15E and Rules 17g-1 through 17g-10. 
For example, the Staff reviewed a sample of 
rating actions of each NRSRO in certain asset 
classes for which it is registered and for certain 
issuers and obligors to determine whether the 
NRSRO operated in accordance with its policies, 
procedures, and rating methodologies. The Staff 
also reviewed rating files and documentation to 
evaluate whether each NRSRO adhered to record-
keeping requirements.
21
18 See IOSCO, Supervisory Colleges for Credit Rating Agencies, Final Report (July 2013), available at https://www.iosco.org/
library/pubdocs/pdf/IOSCOPD416.pdf. The SEC serves as chair of the college for S&P and OCR Staff represents the SEC 
in this regard. The European Securities and Markets Authority serves as chair of the college for Fitch and the Financial 
Conduct Authority serves as chair of the college for Moody’s.
19
 Demotech was not registered as an NRSRO during the Review Period and was therefore not the subject of a 2022 Section 
15E examination.
20
 For example, the Staff may review information relating to TCRs in a current examination, even if the referenced activities 
occurred outside of the Review Period.
21
 To select rating actions and rating files to review, the Staff used a risk-based sampling process that is consistent with its 
overall risk assessment approach described in this Report. The Staff also considered factors including, but not limited 
to, the size of the rated asset class in the financial markets and the NRSRO’s business, the NRSRO’s activity in the 
rated asset class, the likelihood of impact on investors if a rating was not determined in accordance with the NRSRO’s 
methodologies and procedures, news reports and developments concerning the NRSROs or particular asset classes, TCRs, 
and information the Staff learned during examinations.
22
 See Section 15E(p)(3)(C)(i)-(iii). In this Report, essential findings are organized by NRSRO within the applicable large, 
medium, and small groups.
2. Terms Used in This Report
This Report contains a summary of, respectively, 
the essential findings of the Staff’s annual exami-
nations, the NRSROs’ responses to any material 
regulatory deficiencies, and whether the NRSROs 
have appropriately addressed the recommendations 
contained in previous reports.
22
For purposes of this Report, the Staff considers an 
“essential finding” to be any instance identified 
by the Staff of apparent non-compliance by an 
NRSRO with the federal securities laws or related 
Commission rules applicable to NRSROs, except 
those instances attributable to a non-recurring 
and non-significant clerical or ministerial error or 
omission.
For purposes of this Report, the Staff considers 
“material regulatory deficiencies” to be essential 
findings that involve:
 ■Conduct or a deficiency that could undermine 
the quality of a credit rating or impair the 
objectivity of an NRSRO’s credit rating process; 
or
 ■Conduct that may be inconsistent with the 
anti-fraud provisions of the federal securities 
laws.

 STAFF REPORT    |  11
The Staff’s determination that an NRSRO appro-
priately addressed a recommendation does not 
constitute its endorsement of that NRSRO or its 
policies, procedures, internal controls, or opera-
tions. In a future examination, the Staff may 
reevaluate the NRSRO’s response to recommenda-
tions that it previously deemed to be appropriately 
addressed by, for example, assessing whether the 
NRSRO fully implemented remedial measures 
and whether those remedial measures appear 
to be effective. The Staff may also review and 
make recommendations concerning the NRSRO’s 
policies, procedures, internal controls, or opera-
tions related to the general subject matter of a 
recommendation that it previously deemed to be 
appropriately addressed. 
The Staff’s assessment of whether an NRSRO 
has appropriately addressed a recommendation 
depends on the specific facts and circumstances, 
including, but not limited to, the promptness of 
the NRSRO’s response, the severity of the conduct 
at issue, and whether the remedial action under-
taken by the NRSRO is expected to fully resolve 
the Staff’s concerns. In addition, the determination 
of whether an NRSRO appropriately addressed 
a recommendation reflects solely the Staff’s view 
and does not necessarily reflect the views of the 
Commission.
3.  Summary of Essential Findings and 
Responses to Material Regulatory 
Deficiencies
For purposes of the Report, the Staff grouped the 
findings by each large NRSRO, medium NRSRO, 
and small NRSRO in a random ordering.
a. Large NRSRO #1
The NRSRO did not appear to comply with the 
Section 15E(g)(1) requirement to enforce policies 
and procedures reasonably designed to prevent 
the misuse of material, non-public information. 
Contrary to the NRSRO’s policies and proce-
dures, in several instances analysts used a personal 
messaging application that was not approved by 
the NRSRO to conduct analytical discussions 
pertaining to the determination of a credit rating. 
The Staff recommended that the NRSRO enforce 
its policies and procedures regarding approved 
communication methods and, to facilitate 
compliance, provide appropriate notice and 
training on those policies to NRSRO personnel 
and institute appropriate discipline with regard to 
personnel who do not follow such policies.
b. Large NRSRO #2
The NRSRO did not promptly provide complete 
records subject to a retention requirement and 
therefore did not appear to comply with Rule 
17g-2(f). The NRSRO did not provide two records 
requested by the Staff in a timely manner, because 
the NRSRO did not conduct an adequate review 
for completeness prior to providing its response. 
The Staff recommended that the NRSRO promptly 
provide complete copies of all relevant documents 
in its productions to the Staff.
c. Large NRSRO #3
The NRSRO did not appear to establish, maintain, 
enforce, and document an effective internal control 
structure governing adherence to policies, proce-
dures, and methodologies for determining credit 
ratings, as required by Section 15E(c)(3)(A). The 
NRSRO did not take a step required in its proce-
dures designed to alert personnel responsible for 
reviewing and validating models that changes had 
been made to a model. As a result, such personnel 
were not aware of a particular change and did not 
conduct a review of that change as required by the 
NRSRO’s procedures, and the NRSRO did not 
detect for approximately two years a model error 
that potentially affected several ratings. The Staff 
recommended that the NRSRO establish, maintain, 
enforce, and document an effective internal control 

12    |  OFFICE OF CREDIT RATINGS 
structure governing adherence to its policies and 
procedures related to model changes. 
d. Medium NRSRO #1
(1) The NRSRO did not appear to establish, 
maintain, enforce, and document policies 
and procedures reasonably designed to assess 
the probability that an issuer of a security 
will default, fail to make timely payment, or 
otherwise not make payments to investors in 
accordance with the terms of the security, as 
required by Rule 17g-8(b)(1). In determining 
a credit rating, the NRSRO excluded from 
the scope of the credit rating certain payment 
obligations under the terms of the security. 
Although disclosed in the accompanying rating 
letter, the exclusion resulted in the NRSRO not 
assessing the likelihood of payment in accor-
dance with the terms of the security and, given 
the Staff’s view that the excluded obligations 
were subject to credit risk, was inconsistent with 
the NRSRO’s general ratings policy and ratings 
scale. The Staff recommended that the NRSRO 
establish, maintain, enforce, and document 
policies and procedures reasonably designed to 
assess the probability that an issuer of a security 
will default, fail to make timely payments, or 
otherwise not make payments to investors in 
accordance with the terms of the security.
The Staff identified such essential finding as a 
material regulatory deficiency.
In its response, the NRSRO stated that, based 
on its analysis of the underlying transaction 
documents and certain other considerations, the 
payment obligations that were excluded from 
the scope of the rating were not subject to credit 
risk. As a result, the NRSRO concluded that 
the approach to the rating was consistent with 
its policies and procedures, including its rating 
scale. The NRSRO indicated a belief that it 
would be inconsistent with the federal securities 
laws to require a credit rating agency to issue 
credit ratings that reflect something other than 
credit risk.
The NRSRO stated that, in response to the 
Staff’s recommendation, it is developing an 
action plan to make enhancements to relevant 
aspects of its compliance program. The NRSRO 
indicated that it will conduct a comprehensive 
review of its relevant procedures and practices 
to identify potential areas of enhancement or 
clarification related to compliance with Rule 
17g-8(b)(1). The NRSRO stated that it would 
enhance controls, procedures, or guidance to 
expressly reflect its current practices designed to 
identify relevant obligations with credit risk and 
confirm that all such obligations are addressed 
by a credit rating. It identified several specific 
processes and practices that may be enhanced. 
The NRSRO also indicated that it would 
expand training opportunities for analytical and 
business development personnel and evaluate 
whether further public disclosure would be 
appropriate and helpful. 
(2) The NRSRO did not appear to comply 
with the Section 15E(g)(1) requirement to 
enforce policies and procedures reasonably 
designed to prevent the misuse of material, 
non-public information. The NRSRO did 
not give a required training covering, among 
other things, the acceptable use of electronic 
communications within the timeframe required 
under its policies. Certain NRSRO personnel 
that did not receive timely training sent 
emails containing confidential information to 
personal email accounts in contravention of 
the NRSRO’s relevant communications policy, 
and the NRSRO did not identify this breach of 
its policy in a timely manner. The Staff recom-
mended that the NRSRO enforce applicable 

 STAFF REPORT    |  13
training policies and procedures in the use of 
non-approved email accounts to prevent the 
misuse of material non-public information and 
to consider whether its policies and procedures 
to prevent the misuse of material non-public 
information are reasonably designed to detect 
unauthorized dissemination of material 
non-public information.
(3) The NRSRO’s policies and procedures 
did not appear to be reasonably designed to 
address a conflict of interest that could arise 
from its business, as required by Section 15E(h)
(1). Specifically, the NRSRO did not appear to 
have reasonably designed policies and proce-
dures to prevent it from issuing or maintaining 
credit ratings solicited by a person that provides 
it with net revenue equaling or exceeding 10% 
of its net revenue in a fiscal year, a prohibited 
conflict of interest set forth in Rule 17g-5(c)(1). 
The NRSRO’s processes related to monitoring 
such a conflict of interest are retrospective 
in nature, and therefore would only serve 
to detect a violation after it occurred rather 
than prevent its occurrence. The Staff recom-
mended that the NRSRO establish, maintain, 
and enforce written policies and procedures 
reasonably designed to prevent it from issuing 
or maintaining a credit rating solicited by a 
person who provided the NRSRO with net 
revenue equaling or exceeding 10% of its total 
net revenue in the prior fiscal year. 
(4) The NRSRO published certain infor-
mation disclosure forms that did not appear to 
be in a format that is easy to use and helpful 
for users of credit ratings to understand the 
information contained therein, as required by 
Rule 17g-7(a)(1)(i)(B). The Staff recommended 
that the NRSRO publish information disclosure 
forms in a format that is easy to use and helpful 
for users of credit ratings to understand the 
information contained in the information 
disclosure forms. 
(5) The NRSRO published information 
disclosure forms that appeared not to adhere 
to the attestation requirements set forth in Rule 
17g-7(a)(1)(iii). The Staff recommended that the 
NRSRO revise its existing procedures so that 
attestations attached to information disclosure 
forms comply with the requirements of the rule. 
e. Medium NRSRO #2
(1) The NRSRO did not appear to enforce an 
internal control governing the implementation 
of and adherence to policies, procedures, and 
methodologies for determining credit ratings, 
as required by Section 15E(c)(3)(A). Contrary 
to its policies and procedures (which require 
documentation of the steps taken in the deter-
mination of a credit rating in order to permit 
an after-the-fact review of a credit rating), 
the NRSRO did not identify, on the relevant 
documentation forms, all of the methodologies 
used in the determination of a credit rating. 
Additionally, the NRSRO did not accurately 
record on such forms additional information 
regarding the determination of some credit 
ratings. The Staff recommended that the 
NRSRO prepare the relevant documentation 
forms as required by its policies and procedures.
(2) The NRSRO did not appear to comply 
with the requirement of Rule 17g-7(a)(2) to 
disclose Forms ABS Due Diligence-15E received 
by the NRSRO. In several instances, third-
party due diligence forms were not attached 
to the corresponding information disclosure 
forms with regard to certain structured finance 
credit ratings. The NRSRO indicated that its 
normal practice for attaching the due diligence 
forms was not successful when the forms were 
password protected. The Staff recommended 

14    |  OFFICE OF CREDIT RATINGS 
that the NRSRO publish each due diligence 
form it receives in the same manner as the 
related credit rating and that the NRSRO 
establish policies and procedures for publishing 
due diligence forms.
(3) The NRSRO did not appear to disclose 
the versions of procedures and methodologies 
used to determine a credit rating, as required 
by Rule 17g-7(a)(1)(ii)(B). In two instances, 
the Staff observed that a methodology used to 
determine the credit rating was omitted from 
the information disclosure form. In one of 
those instances, an outdated version of another 
methodology was also disclosed. The Staff 
recommended that the NRSRO disclose all 
applicable methodologies used to determine 
a credit rating in the relevant information 
disclosure form. 
f. Medium NRSRO #3
(1) The NRSRO did not appear to establish, 
maintain, and enforce written policies and 
procedures reasonable designed to address 
and manage conflicts of interest that can arise 
from its business, as required by Section 15E(h)
(1). Under the NRSRO’s policies, an analyst 
exposed to fee information may need to be 
recused from voting on credit rating actions for 
that entity for a period of time. In one instance, 
an analyst was directed to recuse himself in 
accordance with the policy, but did not do 
so and improperly participated in two rating 
committees during the time in which he was 
required to be recused. It appeared that the 
relevant policy did not include control elements 
sufficient to ensure that required recusals are 
implemented. The Staff recommended that the 
NRSRO establish procedures or controls as 
necessary to enforce its policy relating to analyst 
exposure to fee information.
(2) In certain circumstances, the NRSRO did 
not appear to provide information disclosure 
forms to the same persons that it provided 
credit ratings, as required by Rule 17g-7(a). In 
connection with privately issued credit ratings, 
the NRSRO created but did not distribute the 
accompanying information disclosure forms. 
The Staff recommended that the NRSRO, when 
taking a rating action, disclose the required 
information disclosure forms to the same 
persons who can receive or access the credit 
rating.
g. Small NRSRO #1
(1) The NRSRO published information 
disclosure forms that did not appear to include 
all the information required to be disclosed 
under Rule 17g-7(a). The Staff observed some 
information disclosure forms with missing 
information. Collectively, these forms omitted 
or included incomplete disclosures regarding 
payment for non-credit rating services, potential 
volatility of the credit rating, the sensitivity 
of the credit rating to assumptions, historical 
performance of the credit rating, and the 
expected probability of default and expected 
loss in the event of default. The Staff recom-
mended that the NRSRO include in its infor-
mation disclosure forms all disclosures required 
by Rule 17g-7(a).
(2) The NRSRO did not appear to comply 
with Rule 17g-3(a)(5) when filing a non-public 
financial report with the Commission under the 
rule. The NRSRO’s report contained incomplete 
information that did not reflect the applicable 
rule requirements. The Staff recommended that 
the NRSRO include all required information 
in the Rule 17g-3(a)(5) reports it files with the 
Commission.

 STAFF REPORT    |  15
(3) The NRSRO did not appear to follow 
Form NRSRO instructions when filing certain 
information with the Commission, resulting in 
incomplete information being filed. The Staff 
recommended that the NRSRO’s Form NRSRO 
filings adhere to the Form NRSRO instructions 
and include all required information.
h. Small NRSRO #2
(1) The NRSRO did not appear to establish, 
maintain, and enforce an effective internal 
control structure governing adherence to 
policies, procedures, and methodologies for 
determining credit ratings, as required by 
Section 15E(c)(3)(A). Specifically, the NRSRO 
did not appear to have effective controls for 
determining a metric specified in the NRSRO’s 
methodology that can impact the rating 
outcome. In two instances observed by the Staff, 
a change made by the NRSRO to the metric 
resulted in a significant upward change to the 
credit rating assigned to the entity, notwith-
standing that the same methodology was used 
to determine the credit ratings. The NRSRO’s 
controls did not ensure that the proper metric 
was used when determining credit ratings. The 
Staff recommended that the NRSRO enhance 
its internal controls with respect to its policies, 
procedures, and methodologies pertaining to 
establishing this metric when determining credit 
ratings. The Staff also recommended that the 
NRSRO evaluate the effectiveness of its internal 
controls governing the implementation of and 
adherence to its methodologies for determining 
different types of credit ratings regarding the 
same entity.
The Staff identified such essential finding as a 
material regulatory deficiency.
In its response, the NRSRO stated that it plans 
to require rating committees to approve the 
established metric prior to the determination 
of a credit rating. The NRSRO plans to test 
the effectiveness of the control after it has 
been implemented and to conduct periodic 
reviews to ensure that the NRSRO’s process 
for determining the metric to be used is appro-
priate. The NRSRO further indicated that it 
has enhanced certain controls pertaining to the 
determination of different types of credit ratings 
regarding the same entity and that it intends 
to make additional changes to its procedures 
and controls to address the findings of an 
independent consultant that it had hired to 
review and evaluate aspects of its credit rating 
process for the different types of ratings.
(2) The NRSRO did not appear to establish, 
maintain, and enforce an effective internal 
control structure governing implementation 
of and adherence to policies, procedures, and 
methodologies for determining credit ratings, as 
required by Section 15E(c)(3)(A). This finding 
specifically relates to controls regarding data 
quality, vetting process, and the acquisition of 
information that appeared to be ineffective. 
Although the NRSRO had a process intended 
to gain an understanding of the issuer and 
obligation to be rated, the NRSRO appeared 
not to have engaged in such process in this 
instance and did not appear to have adequate 
controls to ensure that such a process was 
undertaken when appropriate. Another control 
of the NRSRO requires a review to establish 
if data is consistent with analyst expectations. 
This control appeared to be ineffective in identi-
fying apparent inconsistencies between certain 
financial information provided by the issuer 
and other representations made by the issuer. 
Finally, the control afforded by the NRSRO’s 
rating committee appeared to be ineffective 
in ensuring that all material information was 
considered in determining the credit rating. Staff 

16    |  OFFICE OF CREDIT RATINGS 
recommended that the NRSRO enhance its 
internal controls governing implementation of 
and adherence to its policies, procedures, and 
methodologies for determining credit ratings as 
they pertain to the data quality, vetting process, 
and acquisition of information on issuers.
The Staff identified such essential finding as a 
material regulatory deficiency.
In its response, the NRSRO stated that it will 
review and enhance its procedures for reviewing 
and documenting the information it uses to 
determine credit ratings. Additionally, the 
NRSRO indicated that it will strengthen internal 
controls governing what constitutes a sufficient 
amount of high quality information for its 
ratings to help ensure that it does not issue or 
maintain a credit rating without sufficient access 
to such information. 
(3) The NRSRO produced information 
disclosure forms that did not appear to include 
all the information required to be disclosed 
under Rule 17g-7(a). Specifically, the Staff 
observed some information disclosure forms 
containing a link purporting to provide the 
historical performance disclosure required 
by the rule. Clicking on the link displayed 
an error message rather than the required 
information. The Staff recommended that the 
NRSRO publish information disclosure forms 
containing the required information for all 
rating actions.
(4) The NRSRO did not appear to establish, 
maintain, enforce, and document an effective 
internal control structure governing adherence 
to policies, procedures, and methodologies 
for determining credit ratings, as required 
by Section 15E(c)(3)(A). More specifically, 
the NRSRO did not appear to have effective 
internal controls to ensure that audits of its 
rating files identify whether analysts have 
adhered to the NRSRO’s procedures and 
methodologies for determining credit ratings. 
The controls that are in place may lack indepen-
dence, given that the person performing the 
audits also acts as a primary rating analyst and 
in certain cases reviews their own work. The 
Staff recommended that the NRSRO ensure 
the independence of reviews and audits so that 
they function as an effective internal control 
governing adherence to the NRSRO’s policies, 
procedures, and methodologies for determining 
credit ratings.
(5) The NRSRO’s policies and procedures 
did not appear to be reasonably designed to 
address and manage conflicts of interest that 
could arise from its business and to prevent 
the misuse of material, non-public infor-
mation as required by Section 15(h)(1) and 
Section 15E(g)(1), respectively. The apparent 
deficiencies in the NRSRO’s policies and 
procedures relate to the use of shared email 
addresses. The NRSRO’s existing policies and 
procedures do not address access to shared 
email addresses, even though such shared 
email addresses are used by the NRSRO. 
The Staff observed one shared email address 
accessed by both analytical and business 
personnel and another where the extent of 
access was unknown due to an inability of 
the NRSRO to audit such access. In certain 
instances, it appears that analytical personnel 
were exposed to fee information through a 
shared email address, and the use of such 
addresses without appropriate procedures or 
controls creates the possibility of inappro-
priate interaction between analytical and sales 
personnel or the unauthorized dissemination 
of material non-public information though 
such mailboxes. The Staff recommended that 

 STAFF REPORT    |  17
the NRSRO establish, maintain, enforce, and 
document policies and procedures reasonably 
designed to address and manage conflicts of 
interest and prevent the misuse of material 
non-public information with respect to shared 
email addresses.
i. Small NRSRO #3
The NRSRO’s policies and procedures did not 
appear to be reasonably designed to address 
and manage conflicts of interest that could arise 
from its business as required by Section 15E(h)
(1). The policies and procedures in question 
relate to securities holdings of employees, and 
such policies and procedures appeared not 
to prevent the issuance and maintenance of a 
credit rating subject to the prohibited conflict 
of interest set forth in Rule 17g-5(c)(2). The 
NRSRO’s policies and procedures required 
employees with an interest in a rated entity not 
to participate in determining credit ratings of 
that entity. However, the NRSRO discovered 
that an analyst had participated in two rating 
committees while holding securities of a rated 
entity. The Staff recommended that the NRSRO 
establish, maintain, and enforce written policies 
and procedures reasonably designed to address 
and manage conflicts of interest with respect to 
securities holdings.
Additionally, one of the NRSROs appeared not to 
comply with certain requirements in a Commission 
order. The Staff recommended that the NRSRO 
comply with these requirements.
In total the Staff communicated 23 essential 
findings to the NRSROs at the conclusion of the 
2022 Section 15E examinations. Of these essential 
findings: 
23 One of these findings also implicated material, non-public information. This finding is double counted within the list as a 
result.
24
 One of these findings also implicated conflicts of interest. This finding is double counted within the list as a result.
 ■nine related to disclosure or reporting issues, 
implicating Rule 17g-3, Rule 17g-7(a), and 
Form NRSRO;
 ■five related to internal control issues, implicating 
Section 15E(c)(3)(A);
 ■four related to issues addressing or managing 
conflicts of interest, implicating Section 15E(h)
(1) and Rule 17g-5(c);
23
 ■three related to issues regarding the prevention 
of misuse of material, non-public information, 
implicating Section 15E(g)(1);
24
 ■one related to policies and procedures with 
respect to credit rating symbols, numbers, or 
scores, implicating Rule 17g-8(b)(1);
 ■one related to the production of records to 
examiners, implicating Rule 17g-2(f); and
 ■one related to compliance with a prior 
Commission order. 
4.  Responses to Recommendations from 
the 2021 Section 15E Examinations
To assess whether NRSROs appropriately 
addressed findings and recommendations from 
the 2021 Section 15E examinations, the Staff 
reviewed each NRSRO’s written response 
describing its planned remedial measures, 
participated in calls with each NRSRO to discuss 
its written response, and requested additional 
documentation, as appropriate.
During the 2022 Section 15E examinations, the 
Staff assessed each NRSRO’s progress in imple-
menting remedial measures such as establishing 
new or enhancing existing policies or procedures 
or internal controls, or adding personnel and other 
resources in areas such as compliance, information 
technology, or analytics. The Staff takes into 
account that NRSROs may not be able to fully 
implement remedial measures and/or that the Staff 

18    |  OFFICE OF CREDIT RATINGS 
may not be able to fully assess the effectiveness 
of these measures during the 2022 Section 15E 
examinations. 
The Staff has determined all findings and recom-
mendations from the 2021 Section 15E examina-
tions have been appropriately addressed, except 
as noted below. NRSROs generally addressed the 
findings and recommendations from the 2021 
Section 15E examinations by taking remedial 
measures such as adopting new or enhancing 
existing policies or procedures, internal controls, 
or systems and processes, and by adding personnel 
and other resources.
In one instance, the Staff determined that a small 
NRSRO had completed its remedial efforts but that 
such efforts did not appropriately address the corre-
sponding finding and recommendation. In 2021, 
the Staff found that several information disclosure 
forms published by the small NRSRO did not 
appear to include required disclosures regarding the 
source of payment for the credit rating, potential 
volatility of the credit rating, and sensitivity of the 
credit rating to assumptions made by the NRSRO. 
The Staff recommended that the NRSRO ensure 
that its information disclosure forms contain all 
required disclosures. While the Staff observed in the 
2022 examination that the NRSRO made efforts to 
address the previous finding, the Staff determined 
that the NRSRO did not appropriately address the 
2021 finding because the NRSRO’s remediation 
did not address the requirements to disclose the 
potential volatility of the credit rating and the 
sensitivity of the credit rating to assumptions made 
by the NRSRO. 
In another instance, the Staff was unable to 
determine whether its finding and recommen-
dation had been appropriately addressed because 
the NRSRO’s remediation is ongoing and all 
information necessary to assess the remediation is 
not yet available. In 2021, the Staff found that a 
medium NRSRO did not appear to make certain 
disclosures required by Rule 17g-7(a)(1)(ii)(B), 
relating to the version of the NRSRO’s rating 
methodology used for certain rating actions. 
The Staff recommended that the NRSRO ensure 
that it discloses in its information disclosure 
forms the version of the methodology it used to 
determine the credit ratings. The Staff was unable 
to assess remediation in the 2022 examination. 
The NRSRO has indicated it will update all 
relevant disclosure forms on its website to include 
expanded disclosure of methodologies used in 
determining the credit ratings. The NRSRO also 
indicated it would update policies and procedures 
that govern the disclosure of methodologies 
used in determining credit ratings. The NRSRO 
is developing a work plan to address relevant 
updates. The Staff will assess remediation in the 
2023 Section 15E examination. 

 STAFF REPORT    |  19
IV. STATE OF COMPETITION, 
TRANSPARENCY, AND CONFLICTS  
OF INTEREST
25 As discussed in Section IV.A.2 of this Report, information available on the websites of Commercial Mortgage Alert and 
Asset-Backed Alert also shows that DBRS and KBRA have achieved significant market shares in the asset-backed securities 
rating category over the past few years. 
26
 Annual certifications on Form NRSRO must be filed with the Commission on EDGAR pursuant to Rule 17g-1(f) and 
made publicly available without cost on each NRSRO’s website pursuant to Rule 17g-1(i). The number of outstanding 
credit ratings for each rating category for which an NRSRO is registered is reported on Item 7A of Form NRSRO.
A. COMPETITION
1. Select NRSRO Statistics
S
ections IV.A.1.a through 1.c below summarize 
and discuss certain information reported 
by NRSROs on Form NRSRO or pursuant 
to Rule 17g-3 that provides insight into the 
state of competition among NRSROs. While this 
information indicates that the large NRSROs 
continue to account for the highest percentages of 
outstanding ratings, it also shows that the small 
and medium NRSROs continue to compete with 
the large NRSROs in certain rating categories. For 
instance, the information shows that AMB has 
the greatest number of ratings outstanding in the 
insurance category and that DBRS and KBRA have 
gained significant ratings share in the asset-backed 
securities category.
25
a. NRSRO Credit Ratings Outstanding
Each NRSRO annually reports not later than 
March 31st the number of credit ratings 
outstanding, as of the end of the preceding calendar 
year, in each rating category for which it is regis-
tered.
26 
This information, for the calendar year 
ending December 31, 2021, is summarized in 
Charts 2 through 10 below and can be useful in 
determining the breadth of an NRSRO’s coverage 
with respect to issuers, obligors, and securities or 
money market instruments within a particular 
rating category:
 ■Chart 2 depicts the number of credit ratings 
each NRSRO had outstanding in each rating 
category for which it was registered as of 
December 31, 2021. 
 ■Chart 3 depicts the percentage of each NRSRO’s 
outstanding credit ratings of the total credit 
ratings outstanding in each category and overall.
 ■Chart 4 illustrates the relative size of each rating 
category based on the aggregate number of 
ratings reported outstanding by all NRSROs. 
 ■Chart 5 illustrates the percentage of ratings 
each NRSRO had outstanding across all rating 
categories. 

20    |  OFFICE OF CREDIT RATINGS 
 ■Chart 6 illustrates the percentage of ratings 
each NRSRO had outstanding across all rating 
categories other than the government securities 
category.
 ■Chart 7 depicts the percentage of ratings each 
NRSRO had outstanding in the government 
securities category.
 ■Chart 8 depicts the change in the number of 
non-government ratings outstanding for each 
NRSRO over the prior five years.
 ■Chart 9 depicts the change in the number of 
non-government ratings outstanding for each 
small and medium NRSRO over the prior five 
years.
 ■Chart 10 depicts the change in the number of 
asset-backed securities ratings outstanding for 
each NRSRO over the prior five years.
While comparing the number of ratings 
outstanding among NRSROs provides a 
cumulative view on the state of competition over 
time,
27
 comparing the number of ratings issued by 
such NRSROs in a given period provides a more 
current picture of competition among NRSROs. 
Consequently, the information described in Charts 
8 through 10 (which show changes in ratings 
outstanding over a five year period) may provide an 
indication of how NRSROs have been competing 
in recent years. Additionally, the information 
described in Section IV.A.2 of this Report (relating 
to recent market share developments in the asset-
backed securities rating category), which provides 
information about ratings issued each year since 
2020, may provide additional insight regarding the 
27 The ratings counts disclosed on Item 7A of Form NRSRO include outstanding credit ratings, regardless of when they were 
issued. As such, they reflect the rating activity of NRSROs over a period of years.
28
 For example, AMB has traditionally focused on rating insurance companies and their affiliates.
29 An NRSRO identifies its credit rating affiliates on Item 3 of Form NRSRO.
30 Effective January 1, 2015, Item 7A of Form NRSRO and the corresponding Instructions were amended to clarify the 
manner in which the number of outstanding credit ratings should be calculated and presented. The clarifying amendments 
were designed to help ensure that rating count disclosures are consistent across NRSROs. See Nationally Recognized 
Statistical Rating Organizations, Release No. 34-72936 (Aug. 27, 2014), 79 FR 55078, 55220-22 (Sept. 15, 2014) (2014 
Adopting Release), available at https://www.govinfo.gov/content/pkg/FR-2014-09-15/pdf/2014-20890.pdf (discussing the 
clarifying amendments with respect to Item 7 of Form NRSRO).
current competitive landscape among the NRSROs 
in the asset-backed securities rating category.
There are additional limitations to assessing the 
state of competition in each rating category and in 
the aggregate based on the number of outstanding 
ratings. For instance, some NRSROs have pursued 
business strategies to specialize in particular rating 
categories or sub-categories.
28
 Also, the reported 
information does not reflect any credit ratings being 
issued by NRSROs in rating categories in which 
they are not registered with the Commission, nor 
does it reflect ratings issued by an affiliate of an 
NRSRO unless the affiliate is identified as a credit 
rating affiliate.
29
Further, when reporting its outstanding ratings, 
each NRSRO makes its own determination of the 
applicable rating category into which each of its 
ratings falls. The classification of ratings into the 
five rating categories is not necessarily consistent 
across NRSROs.
30
Chart 2 provides the number of outstanding credit 
ratings reported by each NRSRO in its annual 
certification for the calendar year ending December 
31, 2021, in each of the five rating categories 
identified in Section 3(a)(62)(A) for which the 
NRSRO is registered, as applicable, as well as the 
percentage change in total ratings for each NRSRO 
from 2020 to 2021. Chart 3 displays the percentage 
of each NRSRO’s outstanding credit ratings of the 
total outstanding credit ratings of all NRSROs, 
for each rating category in which the NRSRO was 

 STAFF REPORT    |  21
registered, as reported by each NRSRO in its annual 
certification for the calendar year ending December 
31 For example, according to Chart 2, AMB reported that it had 7,286 insurance company credit ratings, and the total of 
the credit ratings in that category reported by all NRSROs was 20,962. Therefore, the percentage of NRSRO insurance 
company ratings attributable to AMB was approximately 34.8% (i.e., 7,286 divided by 20,962, expressed as a percentage), 
as shown on Chart 3.
31, 2021, as well as the percentage increase or 
decrease in total ratings from 2020 to 2021.
31
Chart 2. Number of Outstanding Credit Ratings as of December 31, 2021 by Rating Category
NRSRO
Financial 
Institutions
Insurance 
Companies
Corporate 
Issuers
Asset-
Backed 
Securities
Government 
Securities
Total 
Ratings
Year-Over-Year Change 
in Total Ratings (2020 
to 2021)
AMB
N/R7,2869775N/R8,268
0.33%
DBRS
9,7042323,25425,53522,85661,581-0.31%
EJR
5,5034748,110N/RN/R14,087-31.06%
Fitch
32,7743,14820,71134,653177,403268,689-0.01%
HR
789N/R558N/R4551,8028.49%
JCR
928973,148N/R3464,5193.77%
KBRA
1,65718245518,3159,54830,15785.09%
Moody’s
34,0032,62433,20350,815562,211682,8560.70%
S&P
52,9476,91956,74537, 5 9 3935,8011,090,0051.17%
Total138,30520,962127,161166,9161,708,6202,162,3991.17%
N/R indicates that the NRSRO was not registered in the applicable rating category as of the reporting date.
Percentages have been rounded to the nearest one-hundredth of one percent.
Sources: NRSRO annual certifications for the 2020 and 2021 calendar years, Item 7A on Form NRSRO.
Chart 3. Percentage by Rating Category of Each NRSRO’s Outstanding Credit Ratings of  
the Total Outstanding Credit Ratings of all NRSROs as of December 31, 2021
NRSRO
Financial 
Institutions
Insurance 
Companies
Corporate 
Issuers
Asset-
Backed 
Securities
Government 
Securities
Total 
Ratings
Change in % of Total 
Ratings from 2020 to 
2021
AMB 
N/R34.8%0.8%<0.1%N/R0.4%-0.02%
DBRS
7.0 %1.1%2.6%15.3%1.3%2.8%-0.22%
EJR 
4.0%2.3%6.4%N/RN/R0.7%-1.46%
Fitch
23.7%15.0%16.3%20.8%10.4%12.4%-0.20%
HR
0.6%N/R0.4%N/R<0.1%0.1%0.03%
JCR
0.7%0.5%2.5%N/R<0.1%0.2%0.03%
KBRA
1.2%0.9%0.4%11.0%0.6%1.4%0.94%
Moody’s 
24.6%12.5%26.1%30.4%32.9%31.6%0.43%
S&P
38.3%33.0%44.6%22.5%54.8%50.4%0.47%
N/R indicates that the NRSRO was not registered in the applicable rating category as of the reporting date. 
Percentages have been rounded to the nearest one-hundredth of one percent.
Sources: NRSRO annual certifications for the 2020 and 2021 calendar years, Item 7A on Form NRSRO.

22    |  OFFICE OF CREDIT RATINGS 
The large NRSROs accounted for 94.4% of 
all the ratings outstanding as of December 31, 
2021—slightly lower than their 94.7% share 
as of December 31, 2020.
32
 The aggregate 
share of outstanding credit ratings of the large 
NRSROs decreased in two of the five categories, 
most significantly in the asset-backed securities 
category, which decreased by about 2 percentage 
points. The large NRSROs as a group also 
lost a small amount of their aggregate share of 
outstanding credit ratings in the government 
securities category, which may be attributable, 
in part, to the significant increase in government 
ratings reported by KBRA. KBRA reported 9,548 
government ratings outstanding as of December 
31, 2021, compared to only 141 as of December 
31, 2020. However, given the large number of 
government ratings outstanding in the aggregate, 
KBRA’s government ratings outstanding reflect 
only 0.56% of the total government ratings.
Charts 2 and 3 also show that AMB, a medium 
NRSRO, had the most credit ratings outstanding 
in the insurance category. In each of the past eight 
years, AMB reported that it had the most credit 
ratings outstanding in the insurance category.
33
Chart 4 depicts the percentages of outstanding 
credit ratings attributable to each rating category, 
as reported by the NRSROs in their annual 
certifications for the calendar year ending 
December 31, 2021. 
As illustrated by Chart 4, the largest proportion 
of the aggregate credit ratings reported to be 
outstanding were in the government securities 
32 In 2007, the year when NRSROs began reporting outstanding ratings on Form NRSRO, the large NRSROs accounted for 
98.8% of all outstanding ratings.
33
 See 2021 Staff Report on NRSROs, which can be found under “Staff Reports on Nationally Recognized Statistical Rating 
Organizations” and the Annual Reports for prior years, which can be found under “Annual Reports to Congress” in the 
“Reports and Studies” section of the OCR webpage, available at https://www.sec.gov/ocr/ocr-reports-and-studies.html.
category, which may be attributable to the large 
number of government bond issuers (e.g., issuers 
of municipal securities) and their multiple debt 
offerings. The government securities category 
accounted for 79.0% of the total number of 
credit ratings reported across all categories and, 
as shown on Chart 3 and Chart 7, is also the 
most concentrated rating category, with the large 
NRSROs accounting for 98.1% of all outstanding 
government securities ratings. 
Chart 4. Breakdown of Ratings Reported 
Outstanding by Rating Category as of 
December 31, 2021
5.9%
7.7%
6.4%
79.0%
1.0%
Government Securities 79.0%
Asset-Backed Securities 7.7%
Financial Institutions 6.4%
Corporate Issuers 5.9%
Insurance Companies 1.0%
Percentages have been rounded to the nearest 
one-tenth of one percent. 
Sources: NRSRO annual certifications for the 2021 
calendar year, Item 7A on Form NRSRO.

 STAFF REPORT    |  23
Chart 5 depicts the percentages of the credit ratings 
outstanding that are attributable to each NRSRO 
over all the rating categories; Chart 6 depicts the 
percentages of the credit ratings outstanding that 
are attributable to each NRSRO over all the rating 
categories other than the government securities 
category; and Chart 7 depicts the percentages of 
the credit ratings outstanding that are attributable 
to each applicable NRSRO in the government 
securities category, in each case, as reported by 
each NRSRO in its annual certification for the 
calendar year ending December 31, 2021. 
A comparison of Chart 5 to Chart 6 illus-
trates that there is less concentration in the 
non-government securities rating categories. 
S&P’s and Moody’s percentage share of all 
outstanding ratings declines by 16.4 and 5.0 
percentage points, respectively, when government 
securities are excluded. Fitch’s percentage share of 
outstanding ratings, on the other hand, increases 
by 7.7 percentage points when government 
securities are excluded. The percentage share for 
all the remaining NRSROs also increases when 
government securities are excluded. 
Further, when government securities are included 
in the total calculation, each of the small and 
medium NRSROs, except for DBRS and KBRA, 
has 0.7% or less of all outstanding ratings, 
making it difficult to assess their relative rating 
shares. When government securities are excluded, 
a clearer picture of the relative percentage 
shares of the small and medium NRSROs in 
Chart 5. Breakdown of Ratings Reported 
Outstanding by NRSRO as of December 31, 2021
12.4%
31.6%
2.8%
50.4%
1.4%
0.7%
0.4%
0.2%
0.1%
S&P 50.4%
Moody's 31.6%
Fitch 12.4%
DBRS 2.8%
KBRA 1.4%
EJR 0.7%
AMB 0.4%
JCR 0.2%
HR 0.1%
Percentages have been rounded to the nearest 
one-tenth of one percent. 
Sources: NRSRO annual certifications for the 2021 
calendar year, Item 7A on Form NRSRO.
Chart 6. Breakdown of Non-Government Securities 
Ratings Reported Outstanding by NRSRO as of 
December 31, 2021
8.5%
26.6%
20.1%
4.5%
34.0%
3.1%
1.8%
0.9%
0.3%
S&P 34.0%
Moody's 26.6%
Fitch 20.1%
DBRS 8.5%
KBRA 4.5%
EJR 3.1%
AMB 1.8%
JCR 0.9%
HR 0.3%
Percentages have been rounded to the nearest 
one-tenth of one percent. 
Sources: NRSRO annual certifications for the 2021 
calendar year, Item 7A on Form NRSRO.

24    |  OFFICE OF CREDIT RATINGS 
the categories in which they are active can be 
observed, as illustrated in Chart 6. The percentage 
share of most of the small and medium NRSROs 
for all rating categories other than government 
securities as of December 31, 2021 did not change 
significantly compared to its percentage share as 
of December 31, 2020.
34
 The largest percentage 
share changes were KBRA, whose percentage 
share increased by 0.9%, and EJR whose 
percentage share declined by 1.5%. 
34 A comparison of Chart 6 in this Report with Chart 11 in Section IV.A.1 of the 2021 Staff Report on NRSROs (available 
at https://www.sec.gov/files/2022-ocr-staff-report.pdf) shows that each small and medium NRSRO’s total non-government 
securities ratings share as of December 31, 2021 remained constant or increased modestly compared to the ratings shares 
as of December 31, 2020. 
Chart 8 depicts the change in ratings outstanding 
over a period of five years for all ratings other 
than ratings in the government securities category 
reported outstanding by NRSROs, as reported 
by each NRSRO in its annual certification for the 
calendar year ending December 31, 2017 through 
2021.
As illustrated in Chart 8, reported ratings 
outstanding has remained mostly steady across all 
NRSROs over the past five years and, consistent 
with the information shown in Chart 3 for the year 
ending December 31, 2021, the larger NRSROs 
have significantly more ratings outstanding than 
the medium and small NRSROs. While modest 
on the scale of ratings outstanding by the large 
NRSROs, Chart 8 shows a steady increase in 
ratings outstanding for both DBRS and KBRA over 
the past five years. The extent of this increase for 
DBRS and KBRA is more apparent when viewing 
changes in ratings outstanding on a scale that 
includes only the medium and small NRSROs, as 
illustrated in Chart 9.
Chart 10 depicts the change in ratings outstanding 
over a period of five years for all ratings in the 
asset-backed securities rating class reported 
outstanding by NRSROs.
As discussed in more detail in Section IV.A.2, 
medium NRSROs have been able to make inroads 
in the asset-backed securities rating class. Chart 10 
provides a graphic representation of the increased 
competition in this rating class since 2017. Both 
DBRS and KBRA have steadily increased the 
number of ratings reported outstanding over the 
Chart 7. Breakdown of Government Securities 
Ratings Reported Outstanding on December 31, 2021
32.90%
54.77%
10.38%
0.56%
0.03%
0.02%
1.34%
S&P 54.77%
Moody's 32.90%
Fitch 10.38%
DBRS 1.34%
KBRA 0.56%
HR 0.03%
JCR 0.02%
Percentages have been rounded to the nearest 
one-hundredth of one percent. 
This chart only includes the NRSROs that are registered 
in the government securities category. 
Sources: NRSRO annual certifications for the 2021 
calendar year, Item 7A on Form NRSRO.

 STAFF REPORT    |  25
past five years. While Moody’s and S&P continue 
to report the most ratings outstanding in this 
class, the number of outstanding ratings reported 
by these NRSROs is lower in 2021 as compared 
to 2017. Fitch’s number of ratings has increased 
since 2017, and ratings counts for each of Fitch, 
Moody’s, and S&P have remained fairly steady in 
recent years. 
Chart 8. Total Non-Government Ratings Issued by All NRSROs as of December 31, 2021
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
20212020201920182017
DBRS
EJR
Fitch
HR
AMB
JCR
KBRA
Moody’s
S&P
Chart 9. Total Non-Government Ratings Issued by Medium and Small NRSROs as of December 31, 2021
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
20212020201920182017
DBRS
EJR
HR
JCR
KBRA
AMB

26    |  OFFICE OF CREDIT RATINGS 
b. NRSRO Analytical Staffing Levels
Chart 11 reports the number of credit analysts 
(including credit analyst supervisors) and the 
number of credit analyst supervisors employed by 
each of the NRSROs, as reported on Exhibit 8 to 
Form NRSRO.
35
The large NRSROs report employing 4,535 credit 
analysts (including supervisors), which is approxi-
mately 81.6% of the total number employed by all 
of the NRSROs. The small and medium NRSROs, 
in the aggregate, employ approximately 18.4% of 
all credit analysts employed by NRSROs.
36
 Total 
NRSRO analytical staff declined by about 1% 
compared to the information reported in the prior 
year annual certifications.
35 Effective January 1, 2015, the Instructions for Exhibit 8 to Form NRSRO were amended to clarify that NRSROs must 
include credit analyst supervisors in the total number of credit analysts disclosed on Exhibit 8. This amendment was 
designed to enhance consistency of the disclosures on Exhibit 8 of Form NRSRO. See 2014 Adopting Release, 79 FR at 
55222 (discussing the clarifying amendments to Exhibit 8 of Form NRSRO).
36
 Based on reports by the NRSROs on their annual certifications for the applicable calendar year, the small and medium 
NRSROs, in the aggregate, employed approximately 11.4% of all NRSRO analysts in 2014, 12.8% of all NRSRO 
analysts in 2015, 14.6% of all NRSRO analysts in 2016, 15.2% of all NRSRO analysts in 2017, 15.4% of all NRSRO 
analysts in 2018, 17.0% of all NRSRO analysts in 2019, and 16.3% of all NRSRO analysts in 2020. 
Chart 10. Total ABS Ratings Issued by All NRSROs as of December 31, 2021
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
20212020201920182017
DBRS
Fitch
KBRA
Moody’s
S&P
Chart 11. NRSRO Credit Analysts and  
Credit Analyst Supervisors
NRSRO
Credit Analysts 
(Including Credit 
Analyst Supervisors)
Credit Analyst 
Supervisors
AMB
15562
DBRS
50787
EJR
2111
Fitch
1,288330
HR
5810
JCR
6029
KBRA
21459
Moody’s
1,670256
S&P
1,577127
Total5,550971
Sources: Exhibit 8 to Form NRSRO, in effect as of each 
NRSRO’s annual certification for the 2021 calendar year 
filed on or before March 31, 2022.

 STAFF REPORT    |  27
c. NRSRO Revenue
Chart 12 shows the percentage of total NRSRO 
revenues attributable to the large, medium, and 
small NRSROs since 2018.
37
 Changes to the 
composition of certain registered NRSROs in 
recent years may limit the comparability of the 
revenue distribution across the years.
38
 Nonetheless, 
observations of changes to the distribution of 
revenue may provide some insight into the overall 
competitive landscape. Following a small increase 
in fiscal year 2020, the percentage of aggregate 
NRSRO revenue reported by the large NRSROs 
has fallen below the level reported for fiscal year 
2019. The revenue share of the medium NRSROs 
has generally remained steady since 2018. In fiscal 
year 2021, the medium NRSROs regained most of 
the share of revenue lost in 2020, a year impacted 
by the onset of and response to COVID-19. The 
small NRSROs’ share of overall NRSRO revenue 
37 Pursuant to Rule 17g-3(a)(3), each NRSRO is required to file annually with the Commission an unaudited revenue report, 
which includes revenue received from determining and maintaining credit ratings, subscribers and subscription services, 
granting licenses or rights to publish credit ratings, and other services and products. NRSROs are not required to make 
these revenue reports publicly available. 
38
 Following its acquisition of DBRS in July 2019, Morningstar, Inc. began to integrate the businesses of DBRS and 
Morningstar Credit Ratings, LLC (MCR), which at the time was also registered as an NRSRO. Effective December 30, 
2019, MCR withdrew its registration as an NRSRO. MCR continued to operate as a credit rating affiliate of DBRS until 
November 23, 2020.
39
 See Moody’s Corporation, Annual Report on Form 10-K for the year ended December 31, 2021, available at https://www.
sec.gov/ix?doc=/Archives/edgar/data/0001059556/000105955622000012/mco-20211231.htm. 
has also remained consistent over this time 
period, and increased by 0.3% in fiscal year 2021. 
Although this percentage increase is modest in 
terms of aggregate revenue across all NRSROs, it 
represents a 50% increase in revenue attributable 
to the small NRSROs compared to fiscal years 
2020 and 2019.
Further revenue information is available for 
NRSROs that are owned, in whole or in part, by 
public companies. The following information is 
from the 2021 annual reports of public companies 
with an ownership interest in an NRSRO:
 ■Moody’s Corporation, which is Moody’s parent 
company, reported $3.8 billion in Moody’s 
external revenue for 2021, a 16% increase from 
2020. This increase, according to the report, 
was due to strong growth mainly driven by 
leveraged finance issuance, as issuers refinanced 
existing debt and funded merger and acquisition 
activity, and increased collateralized loan 
obligation and commercial mortgage-backed 
securities activity amid favorable market 
conditions. The corporate finance group, 
financial institutions group, public, project and 
infrastructure finance group, and structured 
finance group of Moody’s had an increase in 
revenue compared to 2020 results.
39
 ■S&P Global Inc. (S&P Global), which is S&P’s 
parent company, reported $4.1 billion in S&P’s 
revenue for 2021, a 14% increase from 2020. 
This increase, according to the report, was 
due to higher bank loan ratings revenue and 
Chart 12. NRSRO Fiscal Year Revenue as a  
Percentage of Aggregate Reported Revenue
2021202020192018
Large NRSROs
93.2%94.1%93.3%93.5%
Medium NRSROs
5.6%5.1%5.9%5.9%
Small NRSROs
1.1%0.8%0.8%0.7%
Percentages have been rounded to the nearest 
one-tenth of one percent. 
Sources: Financial reports filed with the Commission 
under Rule 17g-3(a)(3) for fiscal years ended 2019 
through 2021. For the preparation of this Report, if an 
NRSRO reported revenue in a foreign currency, the 
revenue was converted to U.S. dollars using the average 
exchange rate over all U.S. banking days in the fiscal 
year of such NRSRO.

28    |  OFFICE OF CREDIT RATINGS 
structured finance revenue. Non-transaction 
revenue increased primarily due to an increase 
in surveillance, entity credit ratings, subsidiary 
revenue, and higher revenue from S&P’s 
Ratings Evaluation Service, an analytical tool 
for entities that are considering strategic or 
financial initiatives that could impact their 
creditworthiness.
40
 ■Morningstar, Inc., which is DBRS’s parent 
company, reported $271 million in revenue 
from DBRS, a 30.8% increase in revenue from 
2020. This increase, according to the report, 
was due to robust commercial and residential 
mortgage-backed securities issuance, growth 
from fundamental ratings, expansion into 
U.S. and European corporate middle markets, 
and increased issuance in Canadian non-bank 
financials. Transaction-based revenue from 
one-time, transaction-based fees for ratings 
on newly-issued securities grew 31.2% in 
2021, which represented 65.7% of the revenue 
generated by DBRS. The remainder is classified 
as transaction-related revenue or revenue 
generated by annual fees tied to surveillance, 
research, and other services.
41
Recent regulatory filings show a decline in revenues 
at Moody’s and S&P in the first half of 2022. 
Moody’s Corporation reported $1.5 billion in 
Moody’s external revenue for the first half of 2022, 
a 24% decrease compared with the same period 
in 2021. This decrease, according to the report, 
was due to declines in leveraged finance (high-yield 
40 See S&P Global Inc., Annual Report on Form 10-K for the year ended December 31, 2021, available at https://www.sec.
gov/ix?doc=/Archives/edgar/data/0000064040/000006404022000055/spgi-20211231.htm.
41
 See Morningstar, Inc., Annual Report on Form 10-K for the year ended December 31, 2021, available at https://www.sec.
gov/ix?doc=/Archives/edgar/data/1289419/000128941922000005/morn-20211231.htm.
42
 See Moody’s Corporation, Quarterly Report on Form 10-Q for the period ended June 30, 2022, available at https://www.
sec.gov/ix?doc=/Archives/edgar/data/0001059556/000105955622000051/mco-20220630.htm.
43
 See S&P Global Inc., Quarterly Report on Form 10-Q, for the period ended June 30, 2022, available at https://www.sec.
gov/ix?doc=/Archives/edgar/data/0000064040/000006404022000143/spgi-20220630.htm. 
44
 See Morningstar, Inc., Quarterly Report on Form 10-Q for the period ended June 30, 2022, available at https://www.sec.
gov/ix?doc=/Archives/edgar/data/1289419/000128941922000014/morn-20220630.htm.
corporate debt and bank loans) issuance resulting 
from market volatility relating to macroeconomic 
uncertainties, rising borrowing costs, and the 
Russia-Ukraine conflict.
42
S&P Global reported $1.6 billion in revenue at 
S&P for the first half of 2022, a 20% decrease 
compared with the same period in 2021. This 
decrease, according to the report, was due to an 
unfavorable impact from foreign exchange rates, 
lower corporate bond ratings revenue driven by 
a decrease in high-yield and investment-grade 
issuance volumes, lower bank loan ratings 
revenue, decreased issuance of U.S. collateralized 
loan obligations, and reduced issuance volumes 
resulting from unfavorable macroeconomic condi-
tions in 2022.
43 
Morningstar, Inc. reported $134.4 million in DBRS 
revenue for the first half of 2022, a 7.8% increase 
compared with the same period in 2021. This 
increase, according to the report, was achieved 
despite softer issuance across most geographies and 
asset classes. Additionally, while there was strong 
growth in commercial mortgage-backed securities 
issuance, this was partially offset by declines in 
asset-backed securities, residential mortgage-backed 
securities, and corporate and financial institution 
ratings. Finally, structured finance issuance slowed 
sharply due to the geopolitical environment and 
increased interest-rate volatility and liquidity 
premiums in Europe.
44
 

 STAFF REPORT    |  29
2.  Market Share Observations in the Asset-
Backed Securities Rating Category
As noted in Section IV.A.1.a of this Report, the 
number of ratings recently issued by NRSROs 
may give a clearer picture of competition than 
the number of ratings each NRSRO currently has 
outstanding. For example, Chart 3 indicates that, 
as of December 31, 2021, DBRS and KBRA, the 
only medium or small NRSROs that actively rate 
asset-backed securities,
45
 collectively had 26.3% 
of the ratings outstanding in the asset-backed 
securities rating category, which increased from 
24.3% as of December 31, 2020. However, 
the market share data discussed in this Section 
IV.A.2
46
 shows that even higher market share 
percentages have been obtained by DBRS and 
KBRA in recent years for ratings issuance with 
respect to certain types of asset-backed securities. 
45 EJR, HR, and JCR are not registered with the Commission in the asset-backed securities category. See Chart 1. While 
AMB is registered to rate asset-backed securities, as shown in Chart 2, it only has five outstanding asset-backed securities 
ratings as of December 31, 2021, all of which were issued before 2019. For these reasons, this section only discusses 
observations related to DBRS, Fitch, KBRA, Moody’s, and S&P, which are the five NRSROs registered in the asset-backed 
securities category with current asset-backed securities rating activity.
46
 Unless noted otherwise, all market share percentages in this Section IV.A.2 are based on dollar amounts of issuance.
47 Prior to being integrated with DBRS, MCR also actively rated asset-backed securities.
48 See Commercial Mortgage Alert website, available at https://www.greenstreet.com/news/commercial-mortgage-alert and 
Asset-Backed Alert website, available at https://www.greenstreet.com/news/asset-backed-alert. The information in Charts 
13 through 16 is based on information from the Commercial Mortgage Alert’s CMBS database as of August 5, 2022, and 
the information in Charts 17 through 19 and the accompanying discussion is based on information from the Asset-Backed 
Alert’s ABS database as of August 5, 2022. Although analysis of the information from the databases may provide insight 
into recent developments regarding the state of competition among NRSROs in the asset-backed securities rating category, 
it has certain limitations. For instance, the information treats each transaction as one undivided whole. An NRSRO is 
counted as having rated a transaction, and the aggregate amount of securities issued, even if the NRSRO rated only a 
portion of it.
49
 Based on information about the databases available on the Asset-Backed Alert and Commercial Mortgage Alert websites, 
references to “U.S.” CMBS, MBS, ABS, and CLO issuance and market shares in this Section IV.A.2 reflect securities 
issued for sale primarily in the U.S., which include securities issued publicly and those issued under Rule 144A under the 
Securities Act of 1933 (the Securities Act).
50
 Based on information about the database available on the Commercial Mortgage Alert website, the “CMBS” category 
is comprised of transactions secured by a static pool of mortgages or leases on income producing properties, either 
commercial or multi-family.
51
 The term “conduit” refers to a financial intermediary that functions as a link, or conduit, between the lender(s) originating 
loans and the ultimate investor(s). The conduit makes loans or purchases loans from third party correspondents under 
standardized underwriting parameters and once sufficient volume has accumulated, pools the loans for sale to investors 
in the CMBS market. See https://www.crefc.org/uploadedFiles/Site_Framework/Industry_Resources/Glossary%20
Revised%202014%20-Update.pdf. In contrast, a single-borrower transaction includes commercial mortgage loans made 
to a single borrower. 
This market share data continues the growth 
trend the Staff has observed since 2011 for some 
medium NRSROs
47
 in the asset-backed securities 
rating category. 
Section IV.A.2.a and 2.b below discuss NRSRO 
market share information with respect to certain 
asset-backed securities, based on information 
from the databases available on the Commercial 
Mortgage Alert and Asset-Backed Alert websites.
48
a. CMBS
Charts 13 through 16 provide information 
concerning U.S.
49
 CMBS
50
 ratings by NRSROs, 
based on information from the Commercial 
Mortgage Alert database. NRSRO market share 
varies between the conduit CMBS and single-
borrower CMBS segments,
51
 the two segments 

30    |  OFFICE OF CREDIT RATINGS 
that account for most of the non-agency
52
 U.S. 
CMBS transactions rated by NRSROs. The charts 
include reported market share information for total 
non-agency U.S. CMBS transactions,
53
 U.S. conduit 
52 “Non-agency” CMBS refers to CMBS that are not issued or guaranteed by Fannie Mae, Freddie Mac, or Ginnie Mae. 
“Agency” CMBS generally refers to CMBS that are issued or guaranteed by such entities. 
53
 Total U.S. CMBS transactions include single-borrower CMBS, conduit CMBS, and other types of CMBS, such as large 
loan and small-balance/legacy conduit CMBS transactions.
54
 Only agency CMBS transactions with a rating from one or more NRSROs are included for determining NRSRO market 
share in the agency CMBS category.
55
 The market share percentage for each NRSRO in Charts 13 through 16 reflects the total amount rated by the NRSRO as 
a percentage of the total amount rated by all the NRSROs that assigned ratings. Market share percentages are provided 
based on both dollar amounts of issuance and number of deals rated. The sum of the market share percentages exceeds 
100% because it is typical for more than one NRSRO to rate a particular transaction. Likewise, the aggregate issuance 
volume and number of deals represented above exceed the Total Rated Market values for each time period. The source of 
the data for these charts is the Commercial Mortgage Alert’s CMBS database as of August 5, 2022.
CMBS transactions, U.S. single-borrower CMBS 
transactions, and agency CMBS transactions
54
 for 
the first half of calendar year 2022 and calendar 
years 2021 and 2020.
55
Chart 13. Rating Agency Market Shares for Total Non-Agency U.S. CMBS Issued in 2020, 2021, and  
First Half of 2022
1H-2022 
Rank
NRSRO
1H-2022 
Issuance  
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
2021 
Issuance 
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
2020 
Issuance 
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
1
Moody’s34,9893571.0/63.638,3424534.7/31.725,0764246.3/50.0
2
Fitch23,4852347.7/41.857,3616051.9/42.338,0374670.2/54.8
3
DBRS23,1972347.1/41.856,6557151.2/50.021,8933440.4/40.5
4
KBRA16,6141633.7/29.146,4664742.0/33.125,8253247.7/38.1
5
S&P11,4851423.3/25.545,8855541.5/38.718,1762333.6/27.4
Total Rated Market49,26655110,55714254,15588
Chart 14. Rating Agency Market Shares for U.S. Conduit CMBS Issued in 2020, 2021, and First Half of 2022
1H-2022 
Rank
NRSRO
1H-2022 
Issuance  
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
2021 
Issuance 
($Mil.)
No. of 
deals
Market 
Share %  
($)/(#)
2020 
Issuance 
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
1
Fitch16,10516
100.0/100.031,42832100.0/100.026,95330100.0/100.0
2
KBRA10,1241062.9/62.525,8092682.1/81.317,4002064.6/66.7
3
Moody’s8,258851.3/50.06,771721.5/21.911,4571542.5/50.0
4
DBRS8,135850.5/50.06,984722.2/21.99,5531035.4/33.3
5
S&P7,358745.7/43.822,9062272.9/68.814,7691454.8/46.7
Total Rated Market16,10516
 31,42832 26,95330 

 STAFF REPORT    |  31
Chart 15. Rating Agency Market Shares for U.S. Single-Borrower CMBS Issued in 2020, 2021, and  
First Half of 2022
1H-2022 
Rank
NRSRO
1H-2022 
Issuance  
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
2021 
Issuance 
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
2020 
Issuance 
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
1
Moody’s26,4542680.4/68.431,5713839.9/34.511,3882347.9/48.9
2
DBRS15,0621545.8/39.549,6716462.8/58.210,1082042.5/42.6
3
Fitch7, 379722.4/18.425,9332832.8/25.58,5821236.1/25.5
4
KBRA6,213518.9/13.220,6572126.1/19.17,231930.4/19.1
5
S&P4,127712.6/18.422,9793329.9/30.03,154813.3/17.0
Total Rated Market32,8843879,12811023,77647
Chart 16. Rating Agency Market Shares for Agency CMBS Issued in 2020, 2021, and First Half of 2022
1H-2022 
Rank
NRSRO
1H-2022 
Issuance  
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
2021 
Issuance 
($Mil.)
No. of 
deals
Market 
Share %  
($)/(#)
2020 
Issuance 
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
1
Fitch9,484860.4/61.522,4691994.9/95.026,8202190.9/91.3
2
KBRA8,406753.6/53.87,538731.8/35.014,4801149.1/47.8
3
DBRS7,286646.4/46.216,1471368.2/65.015,0111250.9/52.2
4
Moody’s6,208539.6/38.51,21615.1/5.02,67129.1/8.7
Total Rated Market15,6921323,6842029,49123
Charts 13 through 16 show that in 2020, 2021, 
and the first half of 2022 the large NRSROs 
generally held a large percentage of the market 
shares in rating non-agency U.S. CMBS transac-
tions, but DBRS and KBRA have achieved signif-
icant market shares as well. 
As illustrated in Chart 13, in the first half of 2022, 
DBRS and KBRA had the third- and fourth-highest 
market shares, respectively, in the non-agency 
U.S. CMBS segment. In 2021, DBRS was closely 
behind Fitch for the second-highest market share, 
significantly increasing its market share since 2020. 
KBRA has consistently attained a market share 
over 34% since 2020, and in 2021 KBRA obtained 
a higher market share than Moody’s or S&P.
As of the first half of 2022, the U.S. conduit 
CMBS segment represented approximately 30% 
of the non-agency U.S. CMBS transactions. Since 
2020, Fitch has maintained the highest market 
share in the U.S. conduit CMBS segment, rating 
all transactions. However, as illustrated in Chart 
14, KBRA has maintained the second-highest 
market share, measured by both dollar value of 
issuance and number of deals rated, in the U.S. 
conduit CMBS segment since 2020. Additionally, 
as of the first half of 2022, DBRS has rated just 
over half of these transactions. 
In 2021 and the first half of 2022, the relative size 
of the U.S. single-borrower segment was approxi-
mately two-thirds of all non-agency U.S. CMBS 

32    |  OFFICE OF CREDIT RATINGS 
transactions. As illustrated in Chart 15, DBRS has 
achieved significant market share in this segment, 
achieving the highest market share in 2021 and 
the second-highest for 2020 and the first  
half of 2022. 
As illustrated in Chart 16, Fitch had the highest 
market share in the agency CMBS segment  
during 2020 and 2021. However, over the same 
period, DBRS and KBRA had the second and 
third highest market shares, respectively, and 
KBRA and DBRS had the second and third 
highest market shares, respectively, for the first 
half of 2022. 
56 Based on information about the database available on the Asset-Backed Alert website, the “ABS” category is comprised 
of securities that are collateralized by assets other than the following: CMBS; MBS; CLOs; collateral debt obligations 
collateralized primarily by other securities; issuances by municipalities; tax exempt issues; issues that are fully retained by 
an affiliate of the deal sponsor or sold to a commercial paper-conduit operated by an affiliate of the sponsor; commercial 
paper and other continuously offered securities such as medium-term notes; and refinancing of previously offered 
securities.
57
 Based on information about the database available on the Asset-Backed Alert website, the “MBS” category is comprised of 
registered securities backed by U.S. first-lien residential properties (typically jumbo mortgages that would otherwise meet 
the criteria of Fannie Mae and Freddie Mac) and Alt-A home loans. 
58
 Based on information about the database available on the Asset-Backed Alert website, the “CLO” category is comprised 
of deals that take the form of collateralized loan obligations (exclusive of collateralized debt obligations collateralized 
primarily by other securities). In the period reviewed, these consisted of deals involving corporate loan arbitrage, small 
business/SME loans, and commercial real estate loans.
59
 The market share percentage for each NRSRO in Charts 17 through 19 reflects the total amount rated by the NRSRO as 
a percentage of the total amount rated by all the NRSROs that assigned ratings. Market share percentages are provided 
based on both dollar amounts of issuance and number of deals rated. The sum of the market share percentages exceeds 
100% because it is typical for more than one NRSRO to rate a particular transaction. Likewise, the aggregate issuance 
volume and number of deals represented above exceed the Total Rated Market values for each time period. The source of 
the data for these charts is the Asset-Backed Alert’s ABS database as of August 5, 2022.
b. ABS/MBS/CLO
Charts 17 through 19 provide information 
concerning U.S. ABS,
56
 U.S. MBS,
57
 and U.S. 
CLO
58
 ratings by NRSROs, based on information 
from the Asset-Backed Alert database. The charts 
include reported market share information for 
these transactions for the first half of calendar 
year 2022 and calendar years 2021 and 2020.
59
Chart 17 shows that DBRS and KBRA have gained 
and maintained significant U.S. ABS rating market 
shares. Since 2020, KBRA has grown its market 
share, and DBRS has consistently attained a market 
share of over 20%.
Chart 17. Rating Agency Market Shares for U.S. ABS Issued in 2020, 2021, and First Half of 2022
1H-2022 
Rank
NRSRO
1H-2022 
Issuance  
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
2021 
Issuance 
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
2020 
Issuance 
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
1
S&P111,57714252.0/39.0192,96229149.2/43.0159,66024058.3/47.9
2
Moody’s8 7,1 7211240.7/30.8171,70019943.7/29.4114,38215741.8/31.3
3
Fitch79,98011537.3/31.6135,55817734.5/26.1109,28615139.9/30.1
4
KBRA73,69715534.4/42.6101,18825225.8/37.250,55013918.5/27.7
5
DBRS43,5419920.3/27.2123,10623331.4/34.476,12516827.8/33.5
Total Rated Market214,373364392,476677273,685501

 STAFF REPORT    |  33
DBRS and KBRA have been able to gain market 
share in rating more traditional types of ABS. For 
example, in 2021 and the first half of 2022, DBRS 
rated 90.2% and 92.2% of transactions backed 
by student loans, which represented the highest 
market share.
 
Likewise, in 2021 and the first half 
of 2022, KBRA rated 78.7% and 85% of trans-
actions backed by small business loans, which 
represented the highest market share.
60
Both DBRS and KBRA have maintained a signif-
icant market share in certain auto-related asset-
backed securities. In 2021, DBRS rated 47.6% 
of the auto-fleet lease transactions, 33.1% of the 
subprime auto loan transactions, and 17.8% of 
the auto lease transactions. KBRA also maintained 
a significant market share in the subprime auto 
loan transactions, rating 35.1% of such transac-
tions during 2021. This has largely continued 
into the first half of 2022, as DBRS rated 6.9% 
of the auto-fleet lease transactions, 31.7% of 
the subprime auto loan transactions, and 11.1% 
60 Asset-Backed Alert’s ABS database indicates that 50 student loan transactions totaling $32.3 billion and eight small-
business loan transactions totaling $1.2 billion were priced during 2021. Eight student loan transactions totaling $5.6 
billion and eight small-business loan transactions totaling $1.8 billion were priced during the first half of 2022.
61
 Asset-Backed Alert’s ABS database indicates that the following transactions were priced during 2021: 13 auto-fleet 
lease transactions totaling $10.5 billion, 68 subprime auto loan transactions totaling $43.5 billion, and five auto lease 
transactions totaling $3.3 billion. The following transactions were priced during the first half of 2022: 15 auto-fleet lease 
transactions totaling $7.1 billion, 37 subprime auto loan transactions totaling $20.7 billion, and 18 auto lease transactions 
totaling $16.4 billion
of the auto lease transactions, and KBRA rated 
42.7% of the subprime auto loan transactions.
61
Chart 18 shows that the U.S. MBS segment 
remains competitive. KBRA’s market share has 
increased from 34.5% in 2020 to 75.9% in the 
first half of 2022, although DBRS’ market share 
has decreased from 36.2% in 2020 to 10.4% in 
the first half of 2022. DBRS and KBRA have, 
however, achieved notable market share in certain 
types of ABS related to the residential housing 
market, but not considered to be MBS under 
the Asset-Backed Alert database’s criteria. For 
example, DBRS rated 76.9% of the re-performing 
mortgage transactions that priced in the first 
half of 2022. Additionally, KBRA and DBRS 
were active rating securities backed by subprime 
mortgages and risk transfer securities during 
the first half of 2022. For securities backed by 
subprime mortgages, KBRA rated 60.4% and 
DBRS rated 19.6% that priced during the first 
half of 2022; for risk transfer securities, KBRA 
Chart 18. Rating Agency Market Shares for U.S. MBS Issued in 2020, 2021, and First Half of 2022
1H-2022 
Rank
NRSRO
1H-2022 
Issuance  
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
2021 
Issuance 
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
2020 
Issuance 
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
1
KBRA23,0654175.9/69.541,1008647. 5/47. 810,3112434.5/30.4
2
Moody’s21,4493970.5/66.162,82511272.5/62.214,6423149.0/39.2
3
Fitch15,4882750.9/45.832,9967538.1/41.714,7554649.4/58.2
4
DBRS3,177610.4/10.219,6093322.6/18.310,8102436.2/30.4
5
S&P1,69945.6/6.86,130157.1/8.32,49178.3/8.9
Total Rated Market30,4075986,59918029,88379

34    |  OFFICE OF CREDIT RATINGS 
rated 78.2% and DBRS rated 21.8% that priced 
during the first half of 2022.
62
As shown in Chart 19, DBRS and KBRA have 
attained a foothold in the U.S. CLO segment, 
although S&P, Moody’s, and Fitch have had the 
highest market shares since 2020.
In addition to the more traditional categories of 
asset-backed securities classes discussed above, 
DBRS and KBRA have gained significant market 
share in some newer or more esoteric classes of 
asset-backed securities. For example, DBRS and 
KBRA are significant raters of securities backed 
by unsecured consumer loans, including consumer 
loans originated through marketplace lending 
platforms. DBRS and KBRA had the two highest 
market shares in this category in 2021 and the 
first half of 2022, both rating over 44% of the 
62 Asset-Backed Alert’s ABS database indicates that 15 re-performing mortgage transactions totaling $7.6 billion, 61 
subprime mortgage transactions totaling $24.1 billion, and 15 risk transfer transactions totaling $18.3 billion were priced 
during the first half of 2022.
63
 Asset-Backed Alert’s ABS database indicates that 73 unsecured consumer loan transactions totaling $26.8 billion were 
priced during 2021, and 44 unsecured consumer loan transactions totaling $13.2 billion were priced during the first half of 
2022.
64
 Asset-Backed Alert’s ABS database indicates that 16 aircraft-lease receivable transactions totaling $9.1 billion were priced 
during 2021, and two aircraft-lease receivable transactions totaling $1.1 billion were priced during the first half of 2022.
65
 Asset-Backed Alert’s ABS database indicates that 19 whole-business securitization transactions totaling $13.9 billion were 
priced during 2021, and 11 whole business securitization transactions totaling $5.2 billion were priced during the first half 
of 2022.
transactions priced during this period. Compara-
tively, Moody’s, S&P, and Fitch each rated less 
than 30% of these transactions over the same time 
period.
63 
There are additional examples of market share 
gains achieved by a medium NRSRO in discrete 
asset classes. For instance, KBRA rated 85.0% and 
100% of the aircraft-lease receivables transactions 
that priced during 2021 and the first half of 2022, 
respectively, while Moody’s, S&P, and Fitch each 
rated less than 55% of these transactions over the 
same time period.
64
 KBRA was also active rating 
whole-business securitizations during 2021 and the 
first half of 2022, rating 60.2% and 90.5%, respec-
tively, of the issuance amount of such transactions. 
While S&P had a greater market share for 2021 
(rating 75% of the transactions), KBRA had the 
highest market share for the first half of 2022.
65 
Chart 19. Rating Agency Market Shares for U.S. CLOs Issued in 2020, 2021, and First Half of 2022
1H-2022 
Rank
NRSRO
1H-2022 
Issuance  
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
2021 
Issuance 
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
2020 
Issuance 
($Mil.)
No. of 
deals
Market 
Share % 
($)/(#)
1
Moody’s49,99410466.7/64.293,60619248.2/48.918,8904520.1/20.1
2
Fitch35,4167247.3/44.439,1957620.2/19.332,8157235.0/32.1
3
S&P28,8776238.5/38.3101,93120752.5/52.781,58919387.0/86.2
4
KBRA2,36473.2/4.312,979256.7/6.43,541103.8/4.5
5
DBRS15130.2/1.93,22741.7/1.033010.4/0.4
Total Rated Market74,953162194,33339393,785224

 STAFF REPORT    |  35
3. Barriers to Entry
Barriers to entry continue to exist in the credit 
ratings industry, presenting competitive challenges 
for the small and medium NRSROs.
One such potential barrier that has been raised 
by certain small and medium NRSROs are 
the investment management contracts of some 
institutional fund managers and the investment 
guidelines of some fixed income mutual fund 
managers, pension plan sponsors, and endowment 
fund managers, which require the use of ratings 
of specified rating agencies.
66
 The effect of these 
requirements can be to increase the demand for 
and liquidity of securities bearing the ratings of 
specified rating agencies, which may provide an 
incentive for issuers to obtain ratings from the 
specified agencies. Historically, many of these 
guidelines refer to the ratings from the large 
NRSROs by name (i.e., Fitch, Moody’s, and 
S&P). Despite reports that investors are increas-
ingly changing their guidelines to allow for 
investments in securities rated by a wider group 
66 See Statement of Jim Nadler, President and CEO, Kroll Bond Rating Agency, Bond Rating Agencies: Examining the 
“Nationally Recognized” Statistical Rating Organizations Hearing Before the Subcommittee on Investor Protection, 
Entrepreneurship and Capital Markets of the House Committee on Financial Services, 117th Congress (July 21, 2021), 
available at https://democrats-financialservices.house.gov/UploadedFiles/HHRG-117-BA16-Wstate-NadlerJ-20210721.
pdf; see also Letter from KBRA to the Commission (Aug. 19, 2014), available at https://www.sec.gov/comments/s7-18-11/
s71811-88.pdf. 
67
 See, e.g., Big Investors Accept More Rating Agencies, Asset-Backed Alert, May 19, 2017.
68
 See S&P Vaults Past Moody’s in Conduit Sector, Commercial Mortgage Alert, Jan. 24, 2020; S&P, Moody’s Duke It Out in 
Fitch’s Shadow, Commercial Mortgage Alert, Jan. 25, 2019.
69
 See, e.g., Rating Firms Seek Changes to Index, Asset-Backed Alert, May 26, 2017; see also Investment Company Institute, 
2022 Investment Company Fact Book (2022), at 29, available at https://www.icifactbook.org/ (index funds made up 21% 
of assets in long-term funds at the end of 2011 and 43% at the end of 2021).
70
 See Fitch Ratings Joins J.P. Morgan High Yield Bond Indices, Fitch Ratings, June 28, 2017. In a related example, 
DBRS announced that its ratings would be included in the determination of index credit quality classifications for 
CAD-denominated securities in the Bloomberg Barclays Canada Aggregate Index and the Global Aggregate Index, 
resulting in approximately 49 securities being added to the Canadian Aggregate Index. See DBRS Bond Ratings to Be 
Included in the Bloomberg Barclays Canada Aggregate Index, DBRS, Inc., Apr. 19, 2018.
71
 See, e.g., Section IV.C of the March 2012 Annual Report, available at https://www.sec.gov/divisions/marketreg/
ratingagency/nrsroannrep0312.pdf. As discussed in the March 2012 Report, economic barriers to entry include issuers and 
market participants favoring well-established NRSROs due to their reputation, and economies of scale which may allow 
larger NRSROs to offer advantageous services or pricing. Academic literature continues to identify these as barriers to 
entry. See, e.g., Sangiorgi, F. and Spatt, C., The Economics of Credit Rating Agencies, Foundations and Trends in Finance, 
12, 1-116 (2017), available at https://ssrn.com/abstract=3055889.
of NRSROs,
67 
investment guidelines continue to 
be identified as a factor impacting the selection of 
NRSROs to rate certain transactions.
68
 
A related barrier to entry is the inclusion require-
ments of some fixed income indices. To be 
included in certain of these indices, securities must 
be rated by specified NRSROs. Certain investment 
companies try to closely track the performance of 
the indices by purchasing the securities included in 
them (“index funds”). Index funds have grown as 
a share of the fund market, and they can increase 
the demand for securities bearing the ratings 
of particular NRSROs.
69
 For instance, Fitch 
announced that its ratings had been added to the 
J.P. Morgan High-Yield Bond Indices, noting that 
investors rely on such indices to determine which 
bonds suit their level of credit risk.
70
 
Market participants and academics have identified 
various other barriers to entry in the credit rating 
industry, including economic and regulatory 
barriers.
71
 For instance, when the Commission 

36    |  OFFICE OF CREDIT RATINGS 
proposed new rules and rule amendments in 
accordance with the Dodd-Frank Act (the 
NRSRO Amendments), commenters expressed 
concerns that certain of the proposed require-
ments would be burdensome for small NRSROs 
to implement and could raise barriers to entry 
for credit rating agencies to seek to register as 
NRSROs.
72
 In connection with the adoption of the 
NRSRO Amendments, the Commission acknowl-
edged that, despite efforts to limit the impact on 
small entities, the Dodd-Frank Act contained 
requirements, including those implemented by 
the NRSRO Amendments, which impose costs on 
NRSROs and may consequently create barriers to 
entry and have negative impacts on competition.
73
 
At the same time, the Commission recognized 
substantial benefits associated with the NRSRO 
Amendments implementing Title IX, Subtitle 
C of the Dodd-Frank Act, which was designed 
to address the causes of certain market failures 
that may impair the integrity and transparency 
of NRSRO credit ratings.
74
  For instance, certain 
provisions of the NRSRO Amendments were 
designed primarily to enhance the integrity 
of how NRSROs determine credit ratings by 
72 See 2014 Adopting Release, 79 FR 55078 (Sept. 15, 2014) at 55090, 55154, 55161, and 55254-55, available at https://
www.govinfo.gov/content/pkg/FR-2014-09-15/pdf/2014-20890.pdf, see also comment letters received with respect to the 
NRSRO Amendments as proposed, available at https://www.sec.gov/comments/s7-18-11/s71811.shtml.
73
 See 2014 Adopting Release, 79 FR at 55254.
74
 See id. at 55091; see also Section 931 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 
111-203, 124 Stat. 1376, H.R. 4173 (July 21, 2010) (articulating the findings of Congress, including that the activities and 
performance of credit rating agencies are matters of national public interest and that certain market failures necessitate 
increased accountability on the part of credit rating agencies).
75
 See 2014 Adopting Release, 79 FR at 55091.
76
 See id.
77
 See Section IV.C of the December 2015 Annual Report, available at https://www.sec.gov/ocr/reportspubs/annual-
reports/2015-annual-report-on-nrsros.pdf.
78
 For example, KBRA was granted a temporary conditional exemption from Rule 17g-5(c)(1), which prohibits an NRSRO 
from issuing or maintaining a credit rating solicited by a person that, in the most recently ended fiscal year, provided the 
NRSRO with net revenue equaling or exceeding 10% of the total net revenue of the NRSRO for the fiscal year. In another 
example, the Commission granted JCR a temporary conditional exemption from certain requirements of Section 15E(t), 
which include provisions regarding the composition and duties of the supervisory board of an NRSRO. The Commission’s 
orders granting exemption requests can be found under “Exemption Orders” in the “Commission Orders” section of the 
OCR webpage, available at https://www.sec.gov/ocr/ocr-commission-orders.html.
improving internal governance of NRSROs, 
managing potential principal-agent problems and 
conflicts of interest in the credit rating process, 
and promoting adherence to the procedures and 
methodologies for determining credit ratings.
75
 
Other provisions of the NRSRO Amendments 
were designed mainly to enhance the transparency 
of NRSRO credit ratings by increasing disclosure 
and reducing information asymmetries that may 
adversely affect users of credit ratings.
76
 
The NRSRO Amendments as adopted by the 
Commission include various changes from the 
proposed amendments intended to address 
concerns regarding barriers to entry, including 
standards allowing NRSROs to tailor particular 
requirements to their business models, size, and 
rating methodologies.
77
 
Additionally, there are provisions for exemptions 
built into several rules and statutory provisions, 
if the Commission deems that these require-
ments may impose an unreasonable burden on 
the NRSRO. NRSROs may also request exemp-
tions under Section 36 to rules or Exchange Act 
provisions.
78

 STAFF REPORT    |  37
B. TRANSPARENCY
Congress described the Rating Agency Act as an 
act to improve ratings quality for the protection of 
investors and in the public interest “by fostering 
accountability, transparency, and competition in 
the credit rating agency industry.”
79
 Section 932 
of the Dodd-Frank Act is entitled “Enhanced 
regulation, accountability, and transparency of 
NRSROs.” Both acts contain various provisions 
designed to increase the transparency—through 
clear disclosure open to public scrutiny—of, among 
other things, NRSROs’ credit rating procedures 
and methodologies, business practices, and credit 
ratings performance. 
Under Exchange Act rules, NRSROs are required 
to disclose:
 ■Standardized performance statistics;
80
 ■Consolidated information about credit rating 
histories;
81
 ■Information about material changes and 
significant errors in the procedures and 
methodologies used to determine credit 
ratings;
82
 ■Information about specific rating actions;
83
 and 
 ■Clear definitions of each symbol, number, or 
score in the rating scale used by the NRSRO.
84
NRSROs must also disclose certain information in 
connection with each rating action.
85
 Such infor-
79 See the preamble to the Rating Agency Act. 
80
 See Instructions for Exhibit 1 to Form NRSRO. 
81
 See Rule 17g-7(b). 
82
 See Rule 17g-8(a)(4). 
83
 See Rule 17g-7(a). 
84
 See Rule 17g-8(b)(2).
85
 See Rule 17g-7(a). 
86
 See Rule 17g-7(a)(1)(ii). 
87
 The reports accompanying a rating action are frequently available on a paid subscription basis, although some NRSROs 
provide access to such reports for free.
88
 Further transparency may be realized if NRSROs seek public comment for proposed new or changed methodologies. Rule 
17g-8(d)(1)(ii) provides that NRSROs must consider implementing controls reasonably designed to ensure that new or 
updated methodologies are disclosed to the public for consultation prior to their being employed.
mation includes, among other things, the version of 
the procedure or methodology used to determine 
the credit rating, a description of the types of data 
that were relied upon for purposes of determining 
the credit rating, an assessment of the quality of 
information available and considered in deter-
mining the credit rating, and information on the 
sensitivity of the credit ratings to assumptions made 
by the NRSRO.
86
In addition to or in connection with required 
disclosures, NRSROs often issue press releases 
and reports at the time of a rating action to 
describe the rationale behind such rating action, 
and make versions of methodologies for deter-
mining credit ratings available on their websites.
87
 
The availability of underlying methodologies, 
together with a report discussing the analysis 
supporting the rating action, may provide 
additional transparency into an NRSRO’s credit 
analysis and credit rating process.
From time-to-time, NRSROs also publish revisions 
and updates to their methodologies. They may 
also at times publish revisions to the assumptions 
that are inputs to their methodologies and rating 
approaches, including changes to their economic 
outlooks or default rate assumptions. Revised 
methodologies and related assumptions may 
provide additional transparency into changes in the 
NRSROs’ credit views and analyses.
88

38    |  OFFICE OF CREDIT RATINGS 
NRSROs may also provide transparency to the 
extent they publish commentaries or research. 
NRSROs publish commentaries and research 
that generally include data, analyses, or projec-
tions on market sectors and economic outlooks.
89
 
These publications may be helpful to investors 
to understand industry trends and the NRSROs’ 
credit views.
For example, following Russia’s invasion of 
Ukraine, NRSROs began publishing commentaries 
and research that provide their perspectives on the 
potential credit and rating impacts of the conflict 
on issuers and debt obligations in different market 
sectors. They also began publishing Russia-Ukraine 
conflict-related commentaries on economic and 
market trends. KBRA published a report that said 
an estimated 3.7 million Ukrainian refugees from 
the Russia-Ukraine conflict are likely to settle more 
permanently in host countries and that Poland’s 
spending on refugees has amounted to about 1% 
of its GDP through June 2022.
90
 A DBRS report 
expressed the view that despite the negative impact 
on many existing transactions secured by affected 
aircraft, it believes the nationalization of aircraft 
by Russia will not have a material impact on the 
issuance of future transactions because of the rarity 
of such events.
91
NRSROs have also continued to produce 
research in recent years regarding their views 
on ESG matters and how they incorporate ESG 
89 NRSROs may also make market and economic data separately available.
90 See KBRA, Ukraine Refugee Crisis and Host Nation Fiscal Impacts (Aug 23, 2022), available at https://www.kbra.com/
documents/report/70214/esg-ukraine-refugee-crisis-and-host-nation-fiscal-impacts.
91
 See DBRS, Secured Aviation Transactions: Jurisdictional Analysis, Political Risks, and Russian Aircraft Nationalization 
Implications (Aug 18, 2022), available at https://www.dbrsmorningstar.com/research/401563/secured-aviation-
transactions-jurisdictional-analysis-political-risks-and-russian-aircraft-nationalization-implications.
92
 See A.M. Best, Secondary Perils Increasingly Responsible for Largest US Catastrophes (Jan 14, 2022), 
available at https://www3.ambest.com/ambv/sales/bwpurchase.aspx?altsrc=108&record_code=316561&_
ga=2.34478628.405875056.1663286055-1130994754.1614722857.
93
 See KBRA, EVs’ Popularity Could Diminish State Gasoline Taxes for Transportation Funds (Jul 18, 2022), available at 
https://www.kbra.com/documents/report/68864/ev-s-popularity-could-diminish-state-gasoline-taxes-for-transportation-
funds.
considerations in their credit rating actions. For 
example, AMB published research presenting 
its view that secondary perils, such as wildfires, 
tornados, and severe thunderstorms, are 
accounting for a larger share of losses from 
catastrophe events than primary perils, such as 
hurricanes and floods, and that the heightened 
number of significant storms and weather events 
is an indication that climate change is having a 
more drastic and far-reaching effect on global 
weather events.
92
 KBRA wrote in its research that 
demand for electric vehicles will reduce gasoline 
taxes and related revenues and could pressure 
municipal bond issues that rely on them.
93
A number of the Staff’s findings and recommenda-
tions in connection with the 2022 Section 15E 
examinations related to transparency issues. These 
findings included disclosure and reporting issues 
implicating Rule 17g-3, Rule 17g-7(a), and Form 
NRSRO. A description of these findings can be 
found in Section III.D.3 of this report.
C. CONFLICTS OF INTEREST
NRSROs operate under one or more business 
models, each having conflicts of interest. The 
primary business model of the NRSROs is the 
“issuer-pay” model, which is subject to a conflict 
in that the credit rating agency may be influenced 
to determine more favorable (i.e., higher) ratings 
than warranted in order to retain the obligors or 
issuers as clients. Another business model is the 

 STAFF REPORT    |  39
“subscriber-pay” model, under which investors pay 
a subscription fee to access an NRSRO’s ratings. 
This model is also subject to conflicts of interests. 
For example, an NRSRO may be aware that an 
influential subscriber holds a securities position 
(long or short) that could be advantaged if a credit 
rating upgrade or downgrade causes the market 
value of the security to increase or decrease or that 
a subscriber investing in newly issued bonds and 
may obtain higher yields if the bonds were to have 
lower ratings.
In addition to being paid by issuers and 
subscribers, some NRSROs are paid to determine 
ratings by investors. Frequently these engagements 
contemplate the issuance of the credit rating on a 
private basis. In these cases, the NRSRO provides 
the credit rating directly to its client but does not 
publish (or make available to all its subscribers) 
the credit rating or a report detailing its credit 
analysis (although such a report may be provided 
to the client with the rating). This business 
model is subject to conflicts of interest, which 
are dependent on the objectives of the client for 
obtaining the rating.
Section 15E and the related Commission rules 
address conflicts of interest.
94
 For example, Rule 
17g-5 identifies certain conflicts of interest that 
are prohibited under all circumstances
95
 and other 
conflicts of interest that are prohibited unless an 
NRSRO has publicly disclosed the existence of the 
conflict and has implemented policies and proce-
dures reasonably designed to address and manage 
such conflict.
96
94 See, e.g., Section 15E(h) and Rule 17g-5. 
95
 See Rule 17g-5(c).
96
 See Rule 17g-5(a)(1)-(2) and Rule 17g-5(b); Instructions for Exhibits 6 and 7 to Form NRSRO. In addition, Section 15E(t)
(3)(B) requires an NRSRO’s board of directors to oversee the establishment, maintenance, and enforcement of policies and 
procedures to address, manage, and disclose any conflicts of interest.
97
 See Rule 17g-5(c)(2) and Rule 17g-5(c)(4).
98
 See Rule 17g-5(c)(8).
99
 Available at https://www.sec.gov/litigation/admin/2022/34-95127.pdf. 
Among the conflicts of interest identified in Rule 
17g-5 are conflicts involving individual credit 
analysts or other employees of an NRSRO. For 
example, an NRSRO is prohibited from issuing or 
maintaining a credit rating where an employee of 
the NRSRO that participated in determining, or is 
responsible for approving, the credit rating directly 
owns securities of, or is an officer or director of, the 
person that would be subject to the credit rating.
97
Rule 17g-5(c)(8) is another example of a prohibited 
conflict of interest involving persons within an 
NRSRO. Under the Rule, an NRSRO is prohibited 
from issuing or maintaining a credit rating where 
a person within the NRSRO who participates in 
determining or monitoring the rating, or developing 
or approving procedures or methodologies used 
for determining the rating, also (i) participates in 
sales or marketing activities of the NRSRO or its 
affiliate, or (ii) is influenced by sales or marketing 
considerations.
98
 In June 2022, the Commission 
instituted settled administrative and cease-and-
desist proceedings against EJR and its founder 
and chief executive officer, Sean Egan, for, among 
other things, issuing or maintaining credit ratings 
where EJR employees, including Mr. Egan, who 
participated in determining the credit ratings also 
participated in the sales and marketing of a product 
or service of EJR and were also influenced by sales 
or marketing considerations in violation of Rule 
17g-5(c)(8).
99
 In addition, in November 2022, 
the Commission instituted settled administrative 
and cease-and-desist proceedings against S&P 
for issuing and maintaining credit ratings where 
commercial employees, who participated in sales 

40    |  OFFICE OF CREDIT RATINGS 
and marketing activity and were influenced by sales 
and marketing considerations, also participated in 
the determination of credit ratings in violation of 
Rule 17g-5(c)(8) by engaging in numerous commu-
nications with analytical staff.
100
Other statutory provisions and Commission rules 
address conflicts of interest that may arise when 
a credit analyst seeks employment outside the 
NRSRO. Section 15E requires each NRSRO to 
have policies and procedures in place to provide 
for an internal “look-back” review process in 
order to determine whether any conflict of interest 
of a former employee influenced a credit rating 
in certain instances.
101
 Rule 17g-8(c) requires 
an NRSRO’s policies and procedures to address 
instances in which a “look-back” review deter-
100 See In re S&P Global Ratings, Exch. Act Rel. No. 96308 (Nov. 14, 2022), available at https://www.sec.gov/litigation/
admin/2022/34-96308.pdf.
101
 See Section 15E(h)(4)(A).
102
 See Rule 17g-8(c). 
mined that a conflict of interest influenced a credit 
rating. Such policies and procedures are required to 
be reasonably designed to ensure that the NRSRO 
will promptly determine whether a credit rating 
must be revised and promptly publish a revised 
credit rating or an affirmation of the credit rating, 
along with certain disclosures about the existence 
of the conflict.
102
Several of the Staff’s findings and recommenda-
tions in connection with the 2022 Section 15E 
examinations related to conflict of interest issues. 
Among other things, these findings addressed 
apparent issues with policies and procedures 
to address and manage conflicts of interest. A 
description of these findings can be found in 
Section III.D.3 of this report.

 STAFF REPORT    |  41
V. ACTIVITIES RELATING TO NRSROs 
103 Available at https://www.sec.gov/litigation/admin/2022/34-96308.pdf.
104
 Available at https://www.sec.gov/rules/other/2022/34-95243.pdf.
105
 Available at https://www.sec.gov/litigation/admin/2022/34-95127.pdf. 
A.  COMMISSION ORDERS AND 
RELEASES
T
he Commission issued the following  
orders and releases relating to NRSROs  
or credit ratings in general in calendar  
year 2022:
 ■In re S&P Global Ratings, Exch. Act Rel. No. 
96308 (Nov. 14, 2022).
103
 The Commission 
instituted settled administrative and cease-and-
desist proceedings against S&P concerning 
violations of Section 15E(h)(1) and Rules 
17g-5(c)(8)(i) and (ii). The violations were in 
connection with S&P commercial employees 
communicating with analytical staff and thereby 
becoming participants in the rating process for 
purposes of Rule 17g-5(c)(8). The SEC’s order 
also finds that S&P failed to establish, maintain, 
and enforce written policies and procedures 
designed to ensure compliance with Rules 
17g-5(c)(8)(i) and (ii).
 ■Order Granting Registration of Demotech, 
Inc. as a Nationally Recognized Statistical 
Rating Organization, SEC Rel. No. 34-95243 
(July 11, 2022).
104
 The Commission granted 
the registration of Demotech, Inc. with the 
Commission as a nationally recognized 
statistical rating organization under Section 
15E for the insurance companies class of 
credit ratings.
 ■In re Egan-Jones Ratings Company and Sean 
Egan, Exch. Act Rel. No. 95127 (June 21, 
2022).
105
 The Commission instituted settled 
administrative and cease-and-desist proceedings 
against EJR and Sean Egan concerning EJR’s 
violations of Sections 15E(h)(1) and 15E(f)(2) 
and Rules 17g-5(c)(8)(i) and (ii) and 17g-5(c)
(1) and Egan’s causing the Rule 17g-5(c)(8)
(i) and (ii) violations. The violations were in 
connection with failures to separate sales and 
marketing activities and considerations from 
the determination of credit ratings, the issuance 
and maintenance of credit ratings solicited by 
a person that, in the most recently ended fiscal 
year, provided the NRSRO with net revenue 
equaling or exceeding ten percent of the total 
net revenue of the NRSRO for the fiscal year, 
and the issuance and maintenance of ratings in 
certain classes of securities without prominently 
disclosing that such ratings were not issued or 
maintained by an NRSRO that was registered to 
issue ratings in such classes.
 ■Removal of References to Credit Ratings From 
Regulation M, Release No. 34-94499 (Mar. 23, 

42    |  OFFICE OF CREDIT RATINGS 
2022), 87 FR 18312 (Mar. 30, 2022).
106
 The 
Commission re-proposed amendments to 
remove the references to credit ratings included 
in Rules 101 and 102 of Regulation M.
B. COURT JUDGMENT
The following judgment relating to litigation 
brought against a former NRSRO by the 
Commission was entered in calendar year 2022:
 ■Securities and Exchange Commission v. 
Morningstar Credit Ratings, No. 1:21-cv-1359 
(S.D.N.Y. June 7, 2022).
107
 The U.S. District 
Court for the Southern District of New York 
entered a final judgment against MCR. The 
Commission’s complaint alleged that MCR 
violated certain disclosure and internal control 
provisions of Section 15E and certain related 
rules. MCR consented to the entry of the 
final judgment, which ordered it to pay a civil 
money penalty.
106 Available at https://www.federalregister.gov/documents/2022/03/30/2022-06583/removal-of-references-to-credit-ratings-
from-regulation-m.
107
 Available at https://www.sec.gov/litigation/litreleases/2022/judgment25409.pdf. 
108
 Available at https://www.sec.gov/files/2022-ocr-staff-report.pdf. 
C. STAFF PUBLICATION
The Staff issued the following publication relating 
to NRSROs or credit ratings in general in calendar 
year 2022:
 ■Staff Report on Nationally Recognized 
Statistical Rating Organizations, dated January 
2022 (the 2021 Staff Report), as required 
by Section 6 of the Rating Agency Act and 
Section 15E(p)(3)(C).
108
 The 2021 Staff Report 
addresses the matters described in the second 
paragraph under Section II of this Report for 
the period June 26, 2020 through December 31, 
2021, and summarizes the essential findings of 
the examinations conducted by the Staff under 
Section 15E(p)(3)(C) for the review period 
January 1, 2020 to December 31, 2020.

 STAFF REPORT    |  43
VI. APPENDIX: SUMMARY OF 
STATUTORY FRAMEWORK  
AND RULES
109 Pub. L. No. 109-291, 120 Stat. 1327 (2006).
110 Pub. L. No. 111-203, § 932, 124 Stat. 1376, 1872-83 (2010).
111
 See Section 15E(p)(2) for a description of OCR staffing requirements.
112
 Section 15E(b)(2) and Rule 17g-1(f).
113 Section 15E(b)(1) and Rule 17g-1(e).
114 Section 15E(a)(3) and Rule 17g-1(i).
115 Section 15E(a)(1)(B)(i) and Section 15E(a)(1)(B)(ii).
116 Section 15E(c)(3)(A). 
117 Rule 17g-2(b)(12).
118 See, e.g., Rule 17g-8(d)(1)–(4). 
S
ection 15E and Rules 17g-1 through 17g-10 
govern the registration and oversight program 
for credit rating agencies that are registered 
with the Commission as NRSROs. This 
regulatory regime was established by the Rating 
Agency Act
109
 and amended by the Dodd-Frank 
Wall Street Reform and Consumer Protection Act 
(Dodd-Frank Act).
110
The Dodd-Frank Act mandated the creation of 
the Office of Credit Ratings (OCR), which is 
responsible for oversight of credit rating agencies 
registered with the Commission as NRSROs. 
OCR’s Staff includes professionals with expertise 
in a variety of areas that relate to its regulatory 
mission, such as corporate, municipal, and struc-
tured debt finance.
111
 
Pursuant to the Commission’s regulatory regime for 
NRSROs, an NRSRO is required to, among other 
things:
 ■File with the Commission an annual certification 
of its Form NRSRO registration,
112
 promptly 
update its filing in certain circumstances,
113
 and 
make its current Form NRSRO filing and most 
of its current Form NRSRO Exhibits available 
on its public website.
114
 
 ■Disclose certain information, including 
information concerning the NRSRO’s 
performance measurement statistics and its 
procedures and methodologies to determine 
ratings.
115
 ■Establish, maintain, enforce, and document an 
effective internal control structure governing the 
implementation of and adherence to policies, 
procedures, and methodologies for determining 
credit ratings,
116
 and retain records of its internal 
control structure.
117
 ■Consider certain factors with respect to its 
establishment, maintenance, enforcement, and 
documentation of an effective internal control 
structure.
118

44    |  OFFICE OF CREDIT RATINGS 
 ■Establish, maintain, enforce, and document 
policies and procedures reasonably designed 
to achieve certain objectives concerning its 
development and application of, and disclosures 
related to, methodologies and models.
119
 
 ■File an unaudited report containing an 
assessment by management of the effectiveness 
during the fiscal year of the NRSRO’s internal 
control structure governing the implementation 
of and adherence to policies, procedures, 
and methodologies for determining credit 
ratings.
120
 The report must be accompanied 
by a signed statement by the NRSRO’s chief 
executive officer or an individual performing 
similar functions.
121
 ■Establish, maintain, enforce, and document 
policies and procedures that are reasonably 
designed to: assess the probability that an issuer 
of a security or money market instrument will 
default or fail to make required payments to 
investors,
122
 and ensure that it applies any rating 
symbol, number, or score in a manner that is 
consistent for all types of obligors, securities, 
and money market instruments for which the 
symbol, number, or score is used.
123
 
 ■Publish an information disclosure form when 
taking a rating action with respect to a rating 
assigned to an obligor, security, or money-
market instrument in a class for which it is 
registered as an NRSRO.
124
 The information 
form must disclose certain information with 
respect to the particular rating action.
125
 
In addition, the NRSRO must attach to 
the information disclosure form a signed 
119 See, e.g., Rule 17g-8(a)(2)–(5). 
120
 Rule 17g-3(a)(7)(i).
121 Rule 17g-3(b)(2).
122 Rule 17g-8(b)(1).
123 Rule 17g-8(b)(3).
124 Rule 17g-7(a).
125 Rule 17g-7(a)(1)(ii)(A)-(N) specifies the information 
that must be disclosed in the information disclosure 
form.

 STAFF REPORT    |  45
statement by a person within the NRSRO with 
responsibility for the rating action.
126
 ■Make and retain, or retain, certain records, 
including a record documenting its established 
procedures and methodologies used to 
determine credit ratings
127
 and records related 
to its ratings.
128
 An NRSRO must promptly 
furnish to the Commission or its representatives 
copies of required records, including English 
translations of those records, upon request.
129
 ■Establish, maintain, and enforce written 
policies and procedures reasonably 
designed to prevent the misuse of material 
non-public information (MNPI), including 
the inappropriate dissemination of MNPI 
both within and outside the NRSRO, the 
inappropriate trading of securities using MNPI 
by a person within the NRSRO, and the 
inappropriate dissemination of pending credit 
rating actions within and outside the NRSRO 
before issuing the rating on the Internet or 
through another readily accessible means.
130
 ■Establish, maintain, and enforce written 
policies and procedures reasonably designed 
to address and manage conflicts of interest.
131
 
Certain conflicts of interest are expressly 
prohibited,
132
 and for other types of conflicts of 
126 Rule 17g-7(a)(1)(iii).
127 Rule 17g-2(a)(6).
128 The records that an NRSRO must make and retain, or retain, with respect to its ratings include the identity of certain 
persons who participated in determining or approving the rating, records used to form the basis of a rating, external and 
internal communications received or sent by the NRSRO and its employees related to a rating, and for ABS ratings, a 
record of the rationale for any material difference between the final rating assigned and the rating implied by a quantitative 
model that was a substantial component in determining the rating. Rule 17g-2(a)(2)(i), (ii), and (iii); Rule 17g-2(b)(2) and 
(b)(7).
129
 Section 15E(a) and (b) and Rule 17g-2(f).
130 Section 15E(g) and Rule 17g-4.
131 Section 15E(h) and Rule 17g-5. See also Section IV.C of this Report.
132
 Rule 17g-5(c). See also Section IV.C of this Report.
133
 Rule 17g-5(a)(1) and (a)(2); Rule 17g-5(b).
134 Rule 17g-6.
135 Section 15E(a)(1)(B)(v).
136 Section 15E(j)(3).
137 Section 15E(j)(1) and (3).
138 Section 15E(j)(5).
interest, the NRSRO must disclose the conflicts 
and have policies and procedures in place to 
manage them.
133
 ■Refrain from engaging in specified unfair, 
coercive, or abusive practices.
134
 ■Provide information on whether it has in effect a 
code of ethics, and if not, the reasons it does not 
have a code of ethics.
135
 
 ■Establish procedures for the receipt, retention, 
and treatment of complaints regarding credit 
ratings, models, methodologies, and compliance 
with the securities laws and its policies and 
procedures developed under this regulatory 
regime, and of confidential, anonymous 
complaints.
136
 
 ■Designate a compliance officer (the DCO) 
responsible for administering policies and 
procedures related to MNPI and conflicts 
of interest, ensuring compliance with the 
securities laws and regulations, and establishing 
procedures for handling complaints by 
employees or users of credit ratings.
137
 The DCO 
must submit an annual report to the NRSRO 
on the compliance of the NRSRO with the 
securities laws and the NRSRO’s policies and 
procedures, and the NRSRO must file the report 
with the Commission.
138

46    |  OFFICE OF CREDIT RATINGS 
 ■Have a board of directors or similar governing 
body (collectively, the Board), certain of 
whose members must be independent from 
the NRSRO.
139
 An NRSRO’s Board, or 
members thereof, are responsible for exercising 
oversight of specified subjects related to the 
NRSRO’s rating business and for approving 
the procedures and methodologies, including 
qualitative and quantitative data and models 
that the NRSRO uses to determine ratings.
140
139 Section 15E(t)(2).
140 Section 15E(t)(3) and Rule 17g-8(a)(1).
141 Rule 17g-9.
142 Section 15E(h)(4) and (5); Rule 17g-8(c).
 ■Establish, maintain, enforce, and document 
standards of training, experience, and 
competence for the individuals it employs to 
participate in the determination of credit ratings 
that are reasonably designed to achieve the 
objective that the NRSRO produces accurate 
credit ratings, and retain a record of these 
standards.
141
 
 ■Establish policies and procedures regarding 
post-employment activities of certain former 
personnel.
142



WASHINGTON, DC

Staff Report

FEBRUARY | 2023

NATIONALLY RECOGNIZED  

STATISTICAL RATING ORGANIZATIONS

ON

Office of Credit Ratings

U.S. Securities and Exchange Commission

As Required by Section 6 of the Credit Rating Agency Reform Act of 2006 
and Section 15E(p)(3)(C) of the Securities Exchange Act of 1934



02  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

This is a report of the Staff of the U.S. Securities and Exchange Commission. Staff reports, Investor Bulletins, and 
other staff documents represent the views of Commission staff and are not a rule, regulation, or statement of the 
Commission. The Commission has neither approved nor disapproved the content of these documents and, like all 
staff statements, they have no legal force or effect, do not alter or amend applicable law, and create no new or 
additional obligations for any person. The Commission has expressed no view regarding the analysis, findings, or 
conclusions contained herein.



	 S TA F F  R E P O R T   |   i

CONTENTS

CHARTS .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                                         ii

I.	 INTRODUCTION.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                                 1

II.	 STATUS OF REGISTRANTS AND APPLICANTS.  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   . 3

III.	 EXAMINATIONS AND MONITORING .  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   . 7

A.	 Overview .  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   . 7

B.	 Risk Assessment .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                               7

C.	 Monitoring.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                                   9

D.	 2022 Section 15E(p)(3) Examinations.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                 10

1.  Overview.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                                10

2.  Terms Used in This Report.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  10

3.  �Summary of Essential Findings and Responses to Material Regulatory Deficiencies.  .   .   .   11

4.  Responses to Recommendations from the 2021 Section 15E Examinations.  .  .  .  .  .  .  .  .  .          17

IV.	 STATE OF COMPETITION, TRANSPARENCY, AND CONFLICTS OF INTEREST .  .   .   .   .   .   .   .   .   .   .  19

A.	 Competition.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                                19

1.  Select NRSRO Statistics .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                       19

2.  Market Share Observations in the Asset-Backed Securities Rating Category.  .  .  .  .  .  .  .         29

3.  Barriers to Entry .  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   . 35

B.	 Transparency .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                                37

C.	 Conflicts of Interest.  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   . 38

V.	 ACTIVITIES RELATING TO NRSROs.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                    41

A.	 Commission Orders and Releases.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                   41

B.	 Court Judgment .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                              42

C.	 Staff Publication .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                              42

VI.	 APPENDIX:  SUMMARY OF STATUTORY FRAMEWORK AND RULES.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                 43



ii  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

CHARTS
Chart 1.	 Table of NRSROs.  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   . 4

Chart 2.	� Number of Outstanding Credit Ratings as of December 31, 2021 by  
Rating Category.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                        21

Chart 3.	� Percentage by Rating Category of Each NRSRO’s Outstanding Credit  
Ratings of the Total Outstanding Credit Ratings of all NRSROs as of  
December 31, 2021.  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   21

Chart 4.	� Breakdown of Ratings Reported Outstanding by Rating Category as of  
December 31, 2021.  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .  22

Chart 5.  	� Breakdown of Ratings Reported Outstanding by NRSRO  
as of December 31, 2021.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                  23

Chart 6.	� Breakdown of Non-Government Securities Ratings Reported  
Outstanding by NRSRO as of December 31, 2021 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                   23

Chart 7.	� Breakdown of Government Securities Ratings Reported  
Outstanding on December 31, 2021.  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .  24

Chart 8.	� Total Non-Government Ratings Issued by All NRSROs as of  
December 31, 2021.  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .  25

Chart 9.	� Total Non-Government Ratings Issued by Medium and Small  
NRSROs as of December 31, 2021.  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .  25

Chart 10.	� Total ABS Ratings Issued by All NRSROs as of December 31, 2021.  .  .  .  .  .  .  .  .  .         26

Chart 11.	 NRSRO Credit Analysts and Credit Analyst Supervisors .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .               26

Chart 12.	� NRSRO Fiscal Year Revenue as a Percentage of Aggregate  
Reported Revenue.  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .  27

Chart 13.	� Rating Agency Market Shares for Total Non-Agency U.S. CMBS  
Issued in 2020, 2021, and First Half of 2022 .  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   . 30

Chart 14.	� Rating Agency Market Shares for U.S. Conduit CMBS Issued in 2020,  
2021, and First Half of 2022.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                 30

Chart 15.	� Rating Agency Market Shares for U.S. Single-Borrower CMBS  
Issued in 2020, 2021, and First Half of 2022 .  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   31

Chart 16.	� Rating Agency Market Shares for Agency CMBS Issued in 2020, 2021, and  
First Half of 2022 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                       31

Chart 17.	� Rating Agency Market Shares for U.S. ABS Issued in 2020, 2021, and  
First Half of 2022 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                      32

Chart 18.	� Rating Agency Market Shares for U.S. MBS Issued in 2020, 2021, and  
First Half of 2022 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                      33

Chart 19.	� Rating Agency Market Shares for U.S. CLOs Issued in 2020, 2021, and  
First Half of 2022 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                       34



	 S TA F F  R E P O R T   |   1

I.	INTRODUCTION

1	 Pub. L. No. 109-291, 120 Stat. 1327 (Sept. 29, 2006). 
2	 Unless otherwise noted, all section and rule references in this report are to the Exchange Act and rules under the Exchange 

Act.
3	 See “Reports and Studies” section of the OCR webpage, available at https://www.sec.gov/ocr/ocr-reports-and-studies.html. 

Prior to 2021, OCR published two separate annual reports: an Annual Report to Congress pursuant to Section 6 of the 
Rating Agency Act and a Summary Examination Report pursuant to Section 15E(p)(3)(C) of the Exchange Act. The 2021 
Staff Report on NRSROs was the first to present in a single report the requirements under both Section 6 of the Rating 
Agency Act and Section 15E(p)(3) of the Exchange Act. 

T
he Staff of the U.S. Securities and Exchange 
Commission (Commission) provides this 
Report regarding nationally recognized statis-
tical rating organizations (NRSROs) pursuant 

to Section 6 of the Credit Rating Agency Reform 
Act of 2006 (Rating Agency Act)1 and Section 
15E(p)(3)(C) of the Securities Exchange Act of 
1934 (Exchange Act).2

Section 6 of the Rating Agency Act requires the 
Commission to submit an annual report to the 
Committee on Banking, Housing, and Urban 
Affairs of the U.S. Senate and the Committee on 
Financial Services of the U.S. House of Representa-
tives that, with respect to the year to which the 
report relates:

	■ Identifies applicants for registration as NRSROs 
under Section 15E;

	■ Specifies the number of, and actions taken on, 
such applications; and

	■ Specifies the views of the Commission on the 
state of competition, transparency, and conflicts 
of interest among NRSROs. 

Section 15E(p)(3)(C) requires the Commission 
to make available to the public an annual report 
summarizing: 

	■ Essential findings of all Section 15E 
examinations, as deemed appropriate by the 
Commission;

	■ NRSROs’ responses to any material regulatory 
deficiencies identified by the Commission; and

	■ Whether the NRSROs have appropriately 
addressed the recommendations of the 
Commission contained in previous annual 
reports. 

This Report addresses the items specified in 
Section 6 of the Rating Agency Act and Section 
15E(p)(3). This is a report of the Staff and, as such, 
reflects solely the Staff’s views. 

Information regarding the topics covered in this 
Report with respect to prior periods can be found 
on the Office of Credit Ratings (OCR) page of the 
Commission’s website.3

.

https://www.sec.gov/ocr/ocr-reports-and-studies.html


2  |   O F F I C E  O F  C R E D I T  R AT I N G S 	



	 S TA F F  R E P O R T   |   3

II.	 STATUS OF REGISTRANTS  
AND APPLICANTS

4	 “Asset-backed securities” has the meaning set forth in 17 CFR 229.1101(c), as in effect on September 29, 2006 (the date of 
enactment of the Rating Agency Act).

5	 Section 3(a)(62)(A).
6	 Section 15E(a) sets out registration procedures for a credit rating agency to voluntarily apply to be registered with the 

Commission as an NRSRO. 
7	 See each NRSRO’s current Form NRSRO for any updates to this information. Each NRSRO must file with the 

Commission on EDGAR a Form NRSRO for annual certification and registration updates pursuant to paragraphs (e) 
and (f) of Rule 17g-1, and each NRSRO must make its current Form NRSRO publicly and freely available on its website 
pursuant to paragraph (i) of Rule 17g-1. Form NRSRO filings are available on the EDGAR system at https://www.sec.
gov/edgar/searchedgar/companysearch.html. Links to each NRSRO’s website can be found under the “Current NRSROs” 
section of the OCR webpage, available at https://www.sec.gov/ocr/ocr-current-nrsros.html. 

I
n 2007, the Commission began granting registra-
tions to credit rating agencies that applied to be 
registered as an NRSRO. Section 3(a)(62) defines 
a “nationally recognized statistical rating organi-

zation” as a credit rating agency that is registered 
under Section 15E and issues credit ratings certified 
by qualified institutional buyers, in accordance with 
Section 15E(a)(1)(B)(ix), with respect to: 

(i)	 Financial institutions, brokers, or dealers; 
(ii)	 Insurance companies; 
(iii)	Corporate issuers; 
(iv)	 Issuers of asset-backed securities;4 
(v)	 Issuers of government securities, municipal 

securities, or securities issued by a foreign 
government; or 

(vi)	 A combination of one or more categories of 
obligors described in any of clauses (i) through 
(v) above.5

As of December 31, 2022, there were ten credit 
rating agencies registered as NRSROs.6 Chart 
1 below lists each NRSRO registered with the 
Commission as of such date, the categories of 
credit ratings described in clauses (i) through (v) of 
Section 3(a)(62)(A) in which each NRSRO is regis-
tered, and the location of each NRSRO’s principal 
office.7

https://www.sec.gov/edgar/searchedgar/companysearch.html
https://www.sec.gov/edgar/searchedgar/companysearch.html
https://www.sec.gov/ocr/ocr-current-nrsros.html


4  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

Chart 1. Table of NRSROs

NRSRO
Categories of Credit 

Ratings Principal Office

A.M. Best Rating Services, Inc. (AMB) (ii), (iii), and (iv) U.S.

DBRS, Inc. (DBRS) (i) through (v) U.S.

Demotech, Inc. (Demotech) (ii) U.S.

Egan-Jones Ratings Company (EJR) (i) through (iii) U.S.

Fitch Ratings, Inc. (Fitch) (i) through (v) U.S.

HR Ratings de México, S.A. de C.V. (HR) (i), (iii), and (v) Mexico

Japan Credit Rating Agency, Ltd. (JCR) (i), (ii), (iii), and (v) Japan

Kroll Bond Rating Agency, LLC (KBRA) (i) through (v) U.S.

Moody’s Investors Service, Inc. (Moody’s) (i) through (v) U.S.

S&P Global Ratings (S&P) (i) through (v) U.S.

8	 Collectively, the three large NRSROs account for approximately 93.2% of the aggregate revenue reported by all 
NRSROs for the 2021 fiscal year in accordance with Rule 17g-3(a)(3); the three medium NRSROs collectively account 
for approximately 5.6% of such aggregate revenue; and the three small NRSROs collectively account for approximately 
1.1% of such aggregate revenue. See infra Section IV.A.1.c, Chart 12. Based on information provided in its application 
for registration, Demotech would be characterized as a small NRSRO for purposes of this Report. However, because 
Demotech was not registered as an NRSRO for the entirety of calendar year 2022, it is generally not discussed in the 
portions of this Report that use this term. References to small NRSROs in this Report do not include Demotech.

9	 Section 15E(a)(2)(C).
10	 See Section 15E(a) and Rule 17g-1; see also Form NRSRO, available at https://www.sec.gov/about/forms/formnrsro.pdf. 

In addition, Section 15E(b) requires NRSROs to promptly amend Form NRSRO if any information or document provided 
therein becomes materially inaccurate.

Solely for purposes of this Report: Fitch, Moody’s, 
and S&P are categorized as “large NRSROs;” 
AMB, DBRS, and KBRA are categorized as 
“medium NRSROs;” and EJR, HR, and JCR are 
categorized as “small NRSROs.” These categoriza-
tions are based on revenue.8

In accordance with the Exchange Act, the 
Commission grants registration as an NRSRO 
if it finds the requirements of Section 15E are 
satisfied and so long as it does not find: (1) that 
the applicant does not have adequate financial and 
managerial resources to produce credit ratings with 
integrity, to materially comply with its procedures 
and methodologies for determining credit ratings 

disclosed on Form NRSRO, and to materially 
comply with provisions of Section 15E related 
to the prevention of the misuse of non-public 
information, management of conflicts of interest, 
prohibited conduct, and designation of a 
compliance officer; or (2) that if the applicant were 
to be registered, its registration would be subject to 
suspension or revocation.9

Applications for initial registration by a credit 
rating agency and for registration by a current 
NRSRO in additional rating categories are filed 
on Form NRSRO.10 A credit rating agency may 
choose not to apply for registration as an NRSRO, 
in which case it may issue credit ratings as a credit 



	 S TA F F  R E P O R T   |   5

rating agency, but it may not issue credit ratings as 
an NRSRO.11 In addition, a credit rating agency 
may choose to apply for registration as an NRSRO 
in one or more rating categories.12 As noted in 
Chart 1 above, certain NRSROs are registered in all 
of the rating categories, and certain NRSROs are 
registered in fewer than all of the rating categories. 

In calendar year 2022, one application for initial 
registration as an NRSRO in the insurance 
companies ratings class was filed with the 
Commission by Demotech. The Commission 
granted Demotech’s registration as an NRSRO in 

11	 Section 3(a)(60) defines the term “credit rating,” Section 3(a)(61) defines the term “credit rating agency,” and Section 
3(a)(62) defines the term “nationally recognized statistical rating organization.” For additional information about credit 
ratings, see Updated Investor Bulletin: The ABCs of Credit Ratings (Oct. 12, 2017), available at https://www.sec.gov/oiea/
investor-alerts-and-bulletins/ib_creditratings.

12	 See Section 3(a)(62)(A)(i) – (vi).
13	 See Order Granting Registration of Demotech, Inc. as a Nationally Recognized Statistical Rating Organization, SEC Rel. 

No. 34-95243 (July 11, 2022), available at: https://www.sec.gov/rules/other/2022/34-95243.pdf.
14	 See Section 15E(c)(2).

such ratings class on July 11, 2022.13 No applica-
tions for registration by a current NRSRO in 
additional rating categories were filed with the 
Commission in calendar year 2022.

The SEC oversees and, as discussed below, 
examines NRSROs. The Commission is prohibited 
by statute, however, from regulating the substance 
of credit ratings or the procedures and method-
ologies the NRSROs use to determine credit 
ratings.14 Methodologies include, among other 
things, the quantitative and qualitative models used 
to determine credit ratings.

https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_creditratings
https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_creditratings
https://www.sec.gov/rules/other/2022/34-95243.pdf




	 S TA F F  R E P O R T   |   7

III.	EXAMINATIONS AND MONITORING

15	 Pursuant to Section 17, the Staff can conduct examinations of NRSROs that supplement the Section 15E examinations.

A.	 OVERVIEW

In accordance with Section 15E(p)(3), the Staff 
conducts examinations of each NRSRO at least 
annually.15 Generally, the purpose of these annual 
examinations is to promote compliance with appli-

cable federal securities laws and rules by identifying 
potential instances of non-compliance by NRSROs 
with their statutory and regulatory obligations and 
recommending remedial action. Information obtained 
during an examination can also inform Staff of 
noteworthy industry developments. 

To facilitate and promote compliance by 
NRSROs with their statutory and regulatory 
obligations, the Staff sends each NRSRO an 
examination summary letter that discusses its 
findings related to that NRSRO and recommends 
remedial measures. When appropriate, Staff may 
refer findings to the Commission’s Division of 
Enforcement for investigation.

Section 15E(p)(3)(B) provides that each NRSRO 
examination (Section 15E examinations) shall 
include a review conducted of the following eight 
topic areas (Section 15E Review Areas): 

	■ Whether the NRSRO conducts business in 
accordance with its policies, procedures, and 
rating methodologies; 

	■ Management of conflicts of interest by the 
NRSRO; 

	■ Implementation of ethics policies by the 
NRSRO;

	■ Internal supervisory controls of the NRSRO;
	■ Governance of the NRSRO; 
	■ Activities of the Designated Compliance Officer 

(DCO) of the NRSRO; 
	■ Processing of complaints by the NRSRO; and 
	■ Policies of the NRSRO governing the 

post-employment activities of its former staff.

This Section III discusses the annual examinations 
pursuant to Section 15E(p)(3) that commenced in 
late 2021 and concluded in late September 2022 
(2022 Section 15E examinations).

B.	 RISK ASSESSMENT

The 2022 Section 15E examinations encom-
passed all of the statutorily required Section 15E 
Review Areas. The Staff also determined areas of 
emphasis and issues of focus for each examination 
based upon an NRSRO-specific risk assessment 
performed by the Staff, while also considering how 
to limit the amount of personal data collected in 
the examination process. The NRSRO-specific 
risk assessments considered a number of factors, 
including, but not limited to: 

	■ NRSROs’ rating activities and operations; 
	■ Staff’s findings, recommendations, and other 

observations from prior examinations; 



8  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

	■ Impact of a potential or actual internal control 
or compliance failure by the NRSRO; 

	■ Recent industry developments affecting 
NRSROs and the asset classes in which the 
NRSRO is registered; 

	■ NRSROs’ filings with the Commission and 
public disclosures; 

	■ NRSROs’ self-identified weaknesses;
	■ Relevant Tips, Complaints, and Referrals 

(TCRs) received by the Commission; and
	■ Risks identified in a risk assessment process.

Through its risk assessment process in connection 
with the 2022 Section 15E examinations, which 
focuses primarily on new and emerging issues, 
OCR staff identified a number of potential risks for 
consideration in the NRSRO-specific risk assess-
ments and incorporation into the examinations, as 
appropriate. The risks identified include:

	■ Surveillance Practices in Times of Stress: 
Rating surveillance processes came under stress 
during COVID-19 due to rapidly changing 
information and declining performance in some 
sectors, which may have required additional 
surveillance reviews. The Staff identified as 
potential risks: the possibility that increased 
analyst workloads could result in failures to 
adhere to applicable surveillance policies and 
procedures; and the possibility that NRSROs 
may have adjusted assumptions or streamlined 
surveillance processes without sufficient 
controls to ensure appropriate documentation 
and disclosure.

	■ Impact of Pandemic on Commercial Real 
Estate: After being adversely affected by 
COVID-19, the single borrower CMBS sector 
experienced an uneven recovery during the 
first half of 2021 as compared to the first half 

16	 Examples of such ESG products and services include: evaluations of the environmental benefits of a project financed with 
the proceeds of a “green” bond issuance; ESG scores based on the expected impact of ESG factors on a company’s growth, 
profitability, capital efficiency, and risk exposure; and assessments of a company’s risk from climate-related scenarios.

of 2020, with properties such as lodging and 
retail lagging. The Staff identified potential 
risks relating to commercial real estate ratings 
with significant exposure to sectors negatively 
impacted by COVID-19, and potential 
non-adherence to methodologies and rating 
processes with respect to: (1) qualitative 
adjustments made to model implied ratings, 
model implied subordination levels, and inputs 
to models used in the ratings process; (2) 
property valuations; and, (3) default frequency 
and severity assumptions or projections.

	■ Changing Methods of Communication/
Technology: The Staff identified as a potential 
risk, given the increased use of text messaging 
applications as a means of communication, 
an increased likelihood that business 
communications are conducted through 
unapproved means and/or that appropriate 
records are not retained.

	■ Securities Ownership: In light of specific findings 
and recommendations in the 2021 Section 15E 
examinations, the Staff identified as a potential 
risk for consideration by all examination teams 
that NRSROs may have weaknesses in their 
policies and procedures to manage conflicts of 
interest or prevent inappropriate use of material 
non-public information with respect to securities 
ownership by employees.

	■ ESG Factors and Products: NRSROs have 
developed ESG methodologies applicable to 
the determination of credit ratings. In addition, 
NRSROs and their affiliates continue to develop 
and offer an increasing number of ESG-related 
products and services that are not credit ratings 
and therefore are not directly regulated by the 
Commission.16 Potential risks identified by the 
Staff include the possibility that the marketing 
and development of stand-alone ESG products 



	 S TA F F  R E P O R T   |   9

may result in conflicts of interest that could 
affect credit ratings.

	■ Ratings on Firms Based in China: The Staff 
identified a number of recent developments in 
China that could potentially have significant 
economic consequences. Such developments 
include: a heightened level of concern regarding 
the creditworthiness of large Chinese real estate 
development firms; regional power reductions 
and rationing resulting from fuel shortages, high 
demand, and regulatory imperatives, leading to 
production slowdowns; and substantial losses 
reported at a majority state-owned financial 
company focused on debt management. The 
Staff identified concerns that these developments 
potentially could result in adverse effects on the 
ratings of firms based in China.

C.	 MONITORING

To help inform its risk assessment process 
and examination program, the Staff in 2022 
monitored credit rating activity, industry trends 
and developments, NRSRO operational develop-
ments and plans, and relevant capital market, 
economic, and financial news and events. The 
Staff’s monitoring activities consisted primarily of 
communications with NRSROs and users of credit 
ratings and reviewing sources such as NRSRO 
publications, news reports, trade publications, 
academic papers, industry conference information, 
and government reports.

For example, the Staff’s discussions covered 
the scope and nature of rating actions that the 
NRSROs attributed to the Russia-Ukraine conflict. 
This included numerous rating actions on entities 

17	 On March 15, 2022, the European Union (EU) announced a ban, effective April 15, 2022, on the provision of credit 
rating services by EU credit rating agencies, or the provision of access to any subscription services in relation to credit 
rating activities by EU credit rating agencies, to any Russian national or natural person residing in Russia or any legal 
person, entity or body established in Russia. See Ukraine: EU agrees fourth package of restrictive measures against Russia, 
European Commission, March 15, 2022, available at https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1761.

in Russia, Ukraine, and other countries affected 
by the conflict due to rising prices of commodities 
and energy, disruption of business activity within 
Russia and Ukraine, and increased cyber and other 
security risks. It also included the withdrawal of 
ratings subject to sanctions.17 In addition, NRSROs 
reported suspending operations in Russia and 
transferring analytical responsibilities, rating 
information, and network access to offices outside 
of the country.

Another topic of the Staff’s monitoring efforts 
was consideration of the effect of rising interest 
rates and inflation. These developments led some 
NRSROs to lower their global and U.S. economic 
growth forecasts and consider the impact on their 
credit ratings.

The Staff’s monitoring efforts also covered NRSRO 
rating activity related to decentralized finance 
(DeFi), such as distributed ledger technologies, 
crypto assets, and smart contracts. This rating 
activity, although limited, included assessments of 
entities directly engaged in DeFi or crypto assets, 
evaluation of crypto asset holdings by rated entities, 
and ratings of structured finance transactions 
utilizing blockchain.

In 2022, the Staff also continued to participate in 
meetings that involved rating agency regulators 
globally, including those of the supervisory colleges 
that were formed for the largest internationally 
active credit rating agencies. The supervisory 
colleges were formed to enhance communication 
among credit rating agency regulators globally with 
respect to examinations of the relevant credit rating 

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1761


10  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

agencies.18 Each college engaged in periodic discus-
sions during 2022 regarding supervisory activities 
related to the credit rating agencies. The Staff also 
conducted additional discussions with foreign 
regulators, as appropriate. 

D.	 �2022 SECTION 15E(p)(3) 
EXAMINATIONS

1.	 Overview

The 2022 Section 15E examinations generally 
focused on the NRSROs’ activities for the period 
covering January 1, 2021 through December 31, 
2021 (the Review Period).19 The examinations also 
reviewed certain activities or credit rating actions 
from outside the Review Period, as appropriate.20 

The 2022 Section 15E examinations included 
a review of the Section 15E Review Areas and 
examination of each NRSRO’s compliance with 
Section 15E and Rules 17g-1 through 17g-10. 
For example, the Staff reviewed a sample of 
rating actions of each NRSRO in certain asset 
classes for which it is registered and for certain 
issuers and obligors to determine whether the 
NRSRO operated in accordance with its policies, 
procedures, and rating methodologies. The Staff 
also reviewed rating files and documentation to 
evaluate whether each NRSRO adhered to record-
keeping requirements.21

18	 See IOSCO, Supervisory Colleges for Credit Rating Agencies, Final Report (July 2013), available at https://www.iosco.org/
library/pubdocs/pdf/IOSCOPD416.pdf. The SEC serves as chair of the college for S&P and OCR Staff represents the SEC 
in this regard. The European Securities and Markets Authority serves as chair of the college for Fitch and the Financial 
Conduct Authority serves as chair of the college for Moody’s.

19	 Demotech was not registered as an NRSRO during the Review Period and was therefore not the subject of a 2022 Section 
15E examination.

20	 For example, the Staff may review information relating to TCRs in a current examination, even if the referenced activities 
occurred outside of the Review Period.

21	 To select rating actions and rating files to review, the Staff used a risk-based sampling process that is consistent with its 
overall risk assessment approach described in this Report. The Staff also considered factors including, but not limited 
to, the size of the rated asset class in the financial markets and the NRSRO’s business, the NRSRO’s activity in the 
rated asset class, the likelihood of impact on investors if a rating was not determined in accordance with the NRSRO’s 
methodologies and procedures, news reports and developments concerning the NRSROs or particular asset classes, TCRs, 
and information the Staff learned during examinations.

22	 See Section 15E(p)(3)(C)(i)-(iii). In this Report, essential findings are organized by NRSRO within the applicable large, 
medium, and small groups.

2.	 Terms Used in This Report

This Report contains a summary of, respectively, 
the essential findings of the Staff’s annual exami-
nations, the NRSROs’ responses to any material 
regulatory deficiencies, and whether the NRSROs 
have appropriately addressed the recommendations 
contained in previous reports.22

For purposes of this Report, the Staff considers an 
“essential finding” to be any instance identified 
by the Staff of apparent non-compliance by an 
NRSRO with the federal securities laws or related 
Commission rules applicable to NRSROs, except 
those instances attributable to a non-recurring 
and non-significant clerical or ministerial error or 
omission.

For purposes of this Report, the Staff considers 
“material regulatory deficiencies” to be essential 
findings that involve:

	■ Conduct or a deficiency that could undermine 
the quality of a credit rating or impair the 
objectivity of an NRSRO’s credit rating process; 
or

	■ Conduct that may be inconsistent with the 
anti-fraud provisions of the federal securities 
laws.

https://www.iosco.org/library/pubdocs/pdf/IOSCOPD416.pdf
https://www.iosco.org/library/pubdocs/pdf/IOSCOPD416.pdf


	 S TA F F  R E P O R T   |   11

The Staff’s determination that an NRSRO appro-
priately addressed a recommendation does not 
constitute its endorsement of that NRSRO or its 
policies, procedures, internal controls, or opera-
tions. In a future examination, the Staff may 
reevaluate the NRSRO’s response to recommenda-
tions that it previously deemed to be appropriately 
addressed by, for example, assessing whether the 
NRSRO fully implemented remedial measures 
and whether those remedial measures appear 
to be effective. The Staff may also review and 
make recommendations concerning the NRSRO’s 
policies, procedures, internal controls, or opera-
tions related to the general subject matter of a 
recommendation that it previously deemed to be 
appropriately addressed. 

The Staff’s assessment of whether an NRSRO 
has appropriately addressed a recommendation 
depends on the specific facts and circumstances, 
including, but not limited to, the promptness of 
the NRSRO’s response, the severity of the conduct 
at issue, and whether the remedial action under-
taken by the NRSRO is expected to fully resolve 
the Staff’s concerns. In addition, the determination 
of whether an NRSRO appropriately addressed 
a recommendation reflects solely the Staff’s view 
and does not necessarily reflect the views of the 
Commission.

3.	 �Summary of Essential Findings and 

Responses to Material Regulatory 

Deficiencies

For purposes of the Report, the Staff grouped the 
findings by each large NRSRO, medium NRSRO, 
and small NRSRO in a random ordering.

a.	 Large NRSRO #1

The NRSRO did not appear to comply with the 
Section 15E(g)(1) requirement to enforce policies 
and procedures reasonably designed to prevent 
the misuse of material, non-public information. 

Contrary to the NRSRO’s policies and proce-
dures, in several instances analysts used a personal 
messaging application that was not approved by 
the NRSRO to conduct analytical discussions 
pertaining to the determination of a credit rating. 
The Staff recommended that the NRSRO enforce 
its policies and procedures regarding approved 
communication methods and, to facilitate 
compliance, provide appropriate notice and 
training on those policies to NRSRO personnel 
and institute appropriate discipline with regard to 
personnel who do not follow such policies.

b.	 Large NRSRO #2

The NRSRO did not promptly provide complete 
records subject to a retention requirement and 
therefore did not appear to comply with Rule 
17g-2(f). The NRSRO did not provide two records 
requested by the Staff in a timely manner, because 
the NRSRO did not conduct an adequate review 
for completeness prior to providing its response. 
The Staff recommended that the NRSRO promptly 
provide complete copies of all relevant documents 
in its productions to the Staff.

c.	 Large NRSRO #3

The NRSRO did not appear to establish, maintain, 
enforce, and document an effective internal control 
structure governing adherence to policies, proce-
dures, and methodologies for determining credit 
ratings, as required by Section 15E(c)(3)(A). The 
NRSRO did not take a step required in its proce-
dures designed to alert personnel responsible for 
reviewing and validating models that changes had 
been made to a model. As a result, such personnel 
were not aware of a particular change and did not 
conduct a review of that change as required by the 
NRSRO’s procedures, and the NRSRO did not 
detect for approximately two years a model error 
that potentially affected several ratings. The Staff 
recommended that the NRSRO establish, maintain, 
enforce, and document an effective internal control 



12  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

structure governing adherence to its policies and 
procedures related to model changes. 

d.	 Medium NRSRO #1

(1)	 The NRSRO did not appear to establish, 
maintain, enforce, and document policies 
and procedures reasonably designed to assess 
the probability that an issuer of a security 
will default, fail to make timely payment, or 
otherwise not make payments to investors in 
accordance with the terms of the security, as 
required by Rule 17g-8(b)(1). In determining 
a credit rating, the NRSRO excluded from 
the scope of the credit rating certain payment 
obligations under the terms of the security. 
Although disclosed in the accompanying rating 
letter, the exclusion resulted in the NRSRO not 
assessing the likelihood of payment in accor-
dance with the terms of the security and, given 
the Staff’s view that the excluded obligations 
were subject to credit risk, was inconsistent with 
the NRSRO’s general ratings policy and ratings 
scale. The Staff recommended that the NRSRO 
establish, maintain, enforce, and document 
policies and procedures reasonably designed to 
assess the probability that an issuer of a security 
will default, fail to make timely payments, or 
otherwise not make payments to investors in 
accordance with the terms of the security.

The Staff identified such essential finding as a 
material regulatory deficiency.

In its response, the NRSRO stated that, based 
on its analysis of the underlying transaction 
documents and certain other considerations, the 
payment obligations that were excluded from 
the scope of the rating were not subject to credit 
risk. As a result, the NRSRO concluded that 
the approach to the rating was consistent with 
its policies and procedures, including its rating 
scale. The NRSRO indicated a belief that it 

would be inconsistent with the federal securities 
laws to require a credit rating agency to issue 
credit ratings that reflect something other than 
credit risk.

The NRSRO stated that, in response to the 
Staff’s recommendation, it is developing an 
action plan to make enhancements to relevant 
aspects of its compliance program. The NRSRO 
indicated that it will conduct a comprehensive 
review of its relevant procedures and practices 
to identify potential areas of enhancement or 
clarification related to compliance with Rule 
17g-8(b)(1). The NRSRO stated that it would 
enhance controls, procedures, or guidance to 
expressly reflect its current practices designed to 
identify relevant obligations with credit risk and 
confirm that all such obligations are addressed 
by a credit rating. It identified several specific 
processes and practices that may be enhanced. 
The NRSRO also indicated that it would 
expand training opportunities for analytical and 
business development personnel and evaluate 
whether further public disclosure would be 
appropriate and helpful. 

(2)	 The NRSRO did not appear to comply 
with the Section 15E(g)(1) requirement to 
enforce policies and procedures reasonably 
designed to prevent the misuse of material, 
non-public information. The NRSRO did 
not give a required training covering, among 
other things, the acceptable use of electronic 
communications within the timeframe required 
under its policies. Certain NRSRO personnel 
that did not receive timely training sent 
emails containing confidential information to 
personal email accounts in contravention of 
the NRSRO’s relevant communications policy, 
and the NRSRO did not identify this breach of 
its policy in a timely manner. The Staff recom-
mended that the NRSRO enforce applicable 



	 S TA F F  R E P O R T   |   13

training policies and procedures in the use of 
non-approved email accounts to prevent the 
misuse of material non-public information and 
to consider whether its policies and procedures 
to prevent the misuse of material non-public 
information are reasonably designed to detect 
unauthorized dissemination of material 
non-public information.

(3)	 The NRSRO’s policies and procedures 
did not appear to be reasonably designed to 
address a conflict of interest that could arise 
from its business, as required by Section 15E(h)
(1). Specifically, the NRSRO did not appear to 
have reasonably designed policies and proce-
dures to prevent it from issuing or maintaining 
credit ratings solicited by a person that provides 
it with net revenue equaling or exceeding 10% 
of its net revenue in a fiscal year, a prohibited 
conflict of interest set forth in Rule 17g-5(c)(1). 
The NRSRO’s processes related to monitoring 
such a conflict of interest are retrospective 
in nature, and therefore would only serve 
to detect a violation after it occurred rather 
than prevent its occurrence. The Staff recom-
mended that the NRSRO establish, maintain, 
and enforce written policies and procedures 
reasonably designed to prevent it from issuing 
or maintaining a credit rating solicited by a 
person who provided the NRSRO with net 
revenue equaling or exceeding 10% of its total 
net revenue in the prior fiscal year. 

(4)	 The NRSRO published certain infor-
mation disclosure forms that did not appear to 
be in a format that is easy to use and helpful 
for users of credit ratings to understand the 
information contained therein, as required by 
Rule 17g-7(a)(1)(i)(B). The Staff recommended 
that the NRSRO publish information disclosure 
forms in a format that is easy to use and helpful 
for users of credit ratings to understand the 

information contained in the information 
disclosure forms. 

(5)	 The NRSRO published information 
disclosure forms that appeared not to adhere 
to the attestation requirements set forth in Rule 
17g-7(a)(1)(iii). The Staff recommended that the 
NRSRO revise its existing procedures so that 
attestations attached to information disclosure 
forms comply with the requirements of the rule. 

e.	 Medium NRSRO #2

(1)	 The NRSRO did not appear to enforce an 
internal control governing the implementation 
of and adherence to policies, procedures, and 
methodologies for determining credit ratings, 
as required by Section 15E(c)(3)(A). Contrary 
to its policies and procedures (which require 
documentation of the steps taken in the deter-
mination of a credit rating in order to permit 
an after-the-fact review of a credit rating), 
the NRSRO did not identify, on the relevant 
documentation forms, all of the methodologies 
used in the determination of a credit rating. 
Additionally, the NRSRO did not accurately 
record on such forms additional information 
regarding the determination of some credit 
ratings. The Staff recommended that the 
NRSRO prepare the relevant documentation 
forms as required by its policies and procedures.

(2)	 The NRSRO did not appear to comply 
with the requirement of Rule 17g-7(a)(2) to 
disclose Forms ABS Due Diligence-15E received 
by the NRSRO. In several instances, third-
party due diligence forms were not attached 
to the corresponding information disclosure 
forms with regard to certain structured finance 
credit ratings. The NRSRO indicated that its 
normal practice for attaching the due diligence 
forms was not successful when the forms were 
password protected. The Staff recommended 



14  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

that the NRSRO publish each due diligence 
form it receives in the same manner as the 
related credit rating and that the NRSRO 
establish policies and procedures for publishing 
due diligence forms.

(3)	 The NRSRO did not appear to disclose 
the versions of procedures and methodologies 
used to determine a credit rating, as required 
by Rule 17g-7(a)(1)(ii)(B). In two instances, 
the Staff observed that a methodology used to 
determine the credit rating was omitted from 
the information disclosure form. In one of 
those instances, an outdated version of another 
methodology was also disclosed. The Staff 
recommended that the NRSRO disclose all 
applicable methodologies used to determine 
a credit rating in the relevant information 
disclosure form. 

f.	 Medium NRSRO #3

(1)	 The NRSRO did not appear to establish, 
maintain, and enforce written policies and 
procedures reasonable designed to address 
and manage conflicts of interest that can arise 
from its business, as required by Section 15E(h)
(1). Under the NRSRO’s policies, an analyst 
exposed to fee information may need to be 
recused from voting on credit rating actions for 
that entity for a period of time. In one instance, 
an analyst was directed to recuse himself in 
accordance with the policy, but did not do 
so and improperly participated in two rating 
committees during the time in which he was 
required to be recused. It appeared that the 
relevant policy did not include control elements 
sufficient to ensure that required recusals are 
implemented. The Staff recommended that the 
NRSRO establish procedures or controls as 
necessary to enforce its policy relating to analyst 
exposure to fee information.

(2)	 In certain circumstances, the NRSRO did 
not appear to provide information disclosure 
forms to the same persons that it provided 
credit ratings, as required by Rule 17g-7(a). In 
connection with privately issued credit ratings, 
the NRSRO created but did not distribute the 
accompanying information disclosure forms. 
The Staff recommended that the NRSRO, when 
taking a rating action, disclose the required 
information disclosure forms to the same 
persons who can receive or access the credit 
rating.

g.	 Small NRSRO #1

(1)	 The NRSRO published information 
disclosure forms that did not appear to include 
all the information required to be disclosed 
under Rule 17g-7(a). The Staff observed some 
information disclosure forms with missing 
information. Collectively, these forms omitted 
or included incomplete disclosures regarding 
payment for non-credit rating services, potential 
volatility of the credit rating, the sensitivity 
of the credit rating to assumptions, historical 
performance of the credit rating, and the 
expected probability of default and expected 
loss in the event of default. The Staff recom-
mended that the NRSRO include in its infor-
mation disclosure forms all disclosures required 
by Rule 17g-7(a).

(2)	 The NRSRO did not appear to comply 
with Rule 17g-3(a)(5) when filing a non-public 
financial report with the Commission under the 
rule. The NRSRO’s report contained incomplete 
information that did not reflect the applicable 
rule requirements. The Staff recommended that 
the NRSRO include all required information 
in the Rule 17g-3(a)(5) reports it files with the 
Commission.



	 S TA F F  R E P O R T   |   15

(3)	 The NRSRO did not appear to follow 
Form NRSRO instructions when filing certain 
information with the Commission, resulting in 
incomplete information being filed. The Staff 
recommended that the NRSRO’s Form NRSRO 
filings adhere to the Form NRSRO instructions 
and include all required information.

h.	 Small NRSRO #2

(1)	 The NRSRO did not appear to establish, 
maintain, and enforce an effective internal 
control structure governing adherence to 
policies, procedures, and methodologies for 
determining credit ratings, as required by 
Section 15E(c)(3)(A). Specifically, the NRSRO 
did not appear to have effective controls for 
determining a metric specified in the NRSRO’s 
methodology that can impact the rating 
outcome. In two instances observed by the Staff, 
a change made by the NRSRO to the metric 
resulted in a significant upward change to the 
credit rating assigned to the entity, notwith-
standing that the same methodology was used 
to determine the credit ratings. The NRSRO’s 
controls did not ensure that the proper metric 
was used when determining credit ratings. The 
Staff recommended that the NRSRO enhance 
its internal controls with respect to its policies, 
procedures, and methodologies pertaining to 
establishing this metric when determining credit 
ratings. The Staff also recommended that the 
NRSRO evaluate the effectiveness of its internal 
controls governing the implementation of and 
adherence to its methodologies for determining 
different types of credit ratings regarding the 
same entity.

The Staff identified such essential finding as a 
material regulatory deficiency.

In its response, the NRSRO stated that it plans 
to require rating committees to approve the 

established metric prior to the determination 
of a credit rating. The NRSRO plans to test 
the effectiveness of the control after it has 
been implemented and to conduct periodic 
reviews to ensure that the NRSRO’s process 
for determining the metric to be used is appro-
priate. The NRSRO further indicated that it 
has enhanced certain controls pertaining to the 
determination of different types of credit ratings 
regarding the same entity and that it intends 
to make additional changes to its procedures 
and controls to address the findings of an 
independent consultant that it had hired to 
review and evaluate aspects of its credit rating 
process for the different types of ratings.

(2)	 The NRSRO did not appear to establish, 
maintain, and enforce an effective internal 
control structure governing implementation 
of and adherence to policies, procedures, and 
methodologies for determining credit ratings, as 
required by Section 15E(c)(3)(A). This finding 
specifically relates to controls regarding data 
quality, vetting process, and the acquisition of 
information that appeared to be ineffective. 
Although the NRSRO had a process intended 
to gain an understanding of the issuer and 
obligation to be rated, the NRSRO appeared 
not to have engaged in such process in this 
instance and did not appear to have adequate 
controls to ensure that such a process was 
undertaken when appropriate. Another control 
of the NRSRO requires a review to establish 
if data is consistent with analyst expectations. 
This control appeared to be ineffective in identi-
fying apparent inconsistencies between certain 
financial information provided by the issuer 
and other representations made by the issuer. 
Finally, the control afforded by the NRSRO’s 
rating committee appeared to be ineffective 
in ensuring that all material information was 
considered in determining the credit rating. Staff 



16  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

recommended that the NRSRO enhance its 
internal controls governing implementation of 
and adherence to its policies, procedures, and 
methodologies for determining credit ratings as 
they pertain to the data quality, vetting process, 
and acquisition of information on issuers.

The Staff identified such essential finding as a 
material regulatory deficiency.

In its response, the NRSRO stated that it will 
review and enhance its procedures for reviewing 
and documenting the information it uses to 
determine credit ratings. Additionally, the 
NRSRO indicated that it will strengthen internal 
controls governing what constitutes a sufficient 
amount of high quality information for its 
ratings to help ensure that it does not issue or 
maintain a credit rating without sufficient access 
to such information. 

(3)	 The NRSRO produced information 
disclosure forms that did not appear to include 
all the information required to be disclosed 
under Rule 17g-7(a). Specifically, the Staff 
observed some information disclosure forms 
containing a link purporting to provide the 
historical performance disclosure required 
by the rule. Clicking on the link displayed 
an error message rather than the required 
information. The Staff recommended that the 
NRSRO publish information disclosure forms 
containing the required information for all 
rating actions.

(4)	 The NRSRO did not appear to establish, 
maintain, enforce, and document an effective 
internal control structure governing adherence 
to policies, procedures, and methodologies 
for determining credit ratings, as required 
by Section 15E(c)(3)(A). More specifically, 
the NRSRO did not appear to have effective 

internal controls to ensure that audits of its 
rating files identify whether analysts have 
adhered to the NRSRO’s procedures and 
methodologies for determining credit ratings. 
The controls that are in place may lack indepen-
dence, given that the person performing the 
audits also acts as a primary rating analyst and 
in certain cases reviews their own work. The 
Staff recommended that the NRSRO ensure 
the independence of reviews and audits so that 
they function as an effective internal control 
governing adherence to the NRSRO’s policies, 
procedures, and methodologies for determining 
credit ratings.

(5)	 The NRSRO’s policies and procedures 
did not appear to be reasonably designed to 
address and manage conflicts of interest that 
could arise from its business and to prevent 
the misuse of material, non-public infor-
mation as required by Section 15(h)(1) and 
Section 15E(g)(1), respectively. The apparent 
deficiencies in the NRSRO’s policies and 
procedures relate to the use of shared email 
addresses. The NRSRO’s existing policies and 
procedures do not address access to shared 
email addresses, even though such shared 
email addresses are used by the NRSRO. 
The Staff observed one shared email address 
accessed by both analytical and business 
personnel and another where the extent of 
access was unknown due to an inability of 
the NRSRO to audit such access. In certain 
instances, it appears that analytical personnel 
were exposed to fee information through a 
shared email address, and the use of such 
addresses without appropriate procedures or 
controls creates the possibility of inappro-
priate interaction between analytical and sales 
personnel or the unauthorized dissemination 
of material non-public information though 
such mailboxes. The Staff recommended thatS TA F F  R E P O R T   |   17

the NRSRO establish, maintain, enforce, and 
document policies and procedures reasonably 
designed to address and manage conflicts of 
interest and prevent the misuse of material 
non-public information with respect to shared 
email addresses.

i.	 Small NRSRO #3

The NRSRO’s policies and procedures did not 
appear to be reasonably designed to address 
and manage conflicts of interest that could arise 
from its business as required by Section 15E(h)
(1). The policies and procedures in question 
relate to securities holdings of employees, and 
such policies and procedures appeared not 
to prevent the issuance and maintenance of a 
credit rating subject to the prohibited conflict 
of interest set forth in Rule 17g-5(c)(2). The 
NRSRO’s policies and procedures required 
employees with an interest in a rated entity not 
to participate in determining credit ratings of 
that entity. However, the NRSRO discovered 
that an analyst had participated in two rating 
committees while holding securities of a rated 
entity. The Staff recommended that the NRSRO 
establish, maintain, and enforce written policies 
and procedures reasonably designed to address 
and manage conflicts of interest with respect to 
securities holdings.

Additionally, one of the NRSROs appeared not to 
comply with certain requirements in a Commission 
order. The Staff recommended that the NRSRO 
comply with these requirements.

In total the Staff communicated 23 essential 
findings to the NRSROs at the conclusion of the 
2022 Section 15E examinations. Of these essential 
findings: 

23	 One of these findings also implicated material, non-public information. This finding is double counted within the list as a 
result.

24	 One of these findings also implicated conflicts of interest. This finding is double counted within the list as a result.

	■ nine related to disclosure or reporting issues, 
implicating Rule 17g-3, Rule 17g-7(a), and 
Form NRSRO;

	■ five related to internal control issues, implicating 
Section 15E(c)(3)(A);

	■ four related to issues addressing or managing 
conflicts of interest, implicating Section 15E(h)
(1) and Rule 17g-5(c);23

	■ three related to issues regarding the prevention 
of misuse of material, non-public information, 
implicating Section 15E(g)(1);24

	■ one related to policies and procedures with 
respect to credit rating symbols, numbers, or 
scores, implicating Rule 17g-8(b)(1);

	■ one related to the production of records to 
examiners, implicating Rule 17g-2(f); and

	■ one related to compliance with a prior 
Commission order. 

4.	 �Responses to Recommendations from 

the 2021 Section 15E Examinations

To assess whether NRSROs appropriately 
addressed findings and recommendations from 
the 2021 Section 15E examinations, the Staff 
reviewed each NRSRO’s written response 
describing its planned remedial measures, 
participated in calls with each NRSRO to discuss 
its written response, and requested additional 
documentation, as appropriate.

During the 2022 Section 15E examinations, the 
Staff assessed each NRSRO’s progress in imple-
menting remedial measures such as establishing 
new or enhancing existing policies or procedures 
or internal controls, or adding personnel and other 
resources in areas such as compliance, information 
technology, or analytics. The Staff takes into 
account that NRSROs may not be able to fully 
implement remedial measures and/or that the Staff 



18  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

may not be able to fully assess the effectiveness 
of these measures during the 2022 Section 15E 
examinations. 

The Staff has determined all findings and recom-
mendations from the 2021 Section 15E examina-
tions have been appropriately addressed, except 
as noted below. NRSROs generally addressed the 
findings and recommendations from the 2021 
Section 15E examinations by taking remedial 
measures such as adopting new or enhancing 
existing policies or procedures, internal controls, 
or systems and processes, and by adding personnel 
and other resources.

In one instance, the Staff determined that a small 
NRSRO had completed its remedial efforts but that 
such efforts did not appropriately address the corre-
sponding finding and recommendation. In 2021, 
the Staff found that several information disclosure 
forms published by the small NRSRO did not 
appear to include required disclosures regarding the 
source of payment for the credit rating, potential 
volatility of the credit rating, and sensitivity of the 
credit rating to assumptions made by the NRSRO. 
The Staff recommended that the NRSRO ensure 
that its information disclosure forms contain all 
required disclosures. While the Staff observed in the 
2022 examination that the NRSRO made efforts to 
address the previous finding, the Staff determined 
that the NRSRO did not appropriately address the 
2021 finding because the NRSRO’s remediation 

did not address the requirements to disclose the 
potential volatility of the credit rating and the 
sensitivity of the credit rating to assumptions made 
by the NRSRO. 

In another instance, the Staff was unable to 
determine whether its finding and recommen-
dation had been appropriately addressed because 
the NRSRO’s remediation is ongoing and all 
information necessary to assess the remediation is 
not yet available. In 2021, the Staff found that a 
medium NRSRO did not appear to make certain 
disclosures required by Rule 17g-7(a)(1)(ii)(B), 
relating to the version of the NRSRO’s rating 
methodology used for certain rating actions. 
The Staff recommended that the NRSRO ensure 
that it discloses in its information disclosure 
forms the version of the methodology it used to 
determine the credit ratings. The Staff was unable 
to assess remediation in the 2022 examination. 
The NRSRO has indicated it will update all 
relevant disclosure forms on its website to include 
expanded disclosure of methodologies used in 
determining the credit ratings. The NRSRO also 
indicated it would update policies and procedures 
that govern the disclosure of methodologies 
used in determining credit ratings. The NRSRO 
is developing a work plan to address relevant 
updates. The Staff will assess remediation in the 
2023 Section 15E examination. 



	 S TA F F  R E P O R T   |   19

IV. STATE OF COMPETITION, 
TRANSPARENCY, AND CONFLICTS  

OF INTEREST

25	 As discussed in Section IV.A.2 of this Report, information available on the websites of Commercial Mortgage Alert and 
Asset-Backed Alert also shows that DBRS and KBRA have achieved significant market shares in the asset-backed securities 
rating category over the past few years. 

26	 Annual certifications on Form NRSRO must be filed with the Commission on EDGAR pursuant to Rule 17g-1(f) and 
made publicly available without cost on each NRSRO’s website pursuant to Rule 17g-1(i). The number of outstanding 
credit ratings for each rating category for which an NRSRO is registered is reported on Item 7A of Form NRSRO.

A.	 COMPETITION

1.	 Select NRSRO Statistics

S
ections IV.A.1.a through 1.c below summarize 
and discuss certain information reported 
by NRSROs on Form NRSRO or pursuant 
to Rule 17g-3 that provides insight into the 

state of competition among NRSROs. While this 
information indicates that the large NRSROs 
continue to account for the highest percentages of 
outstanding ratings, it also shows that the small 
and medium NRSROs continue to compete with 
the large NRSROs in certain rating categories. For 
instance, the information shows that AMB has 
the greatest number of ratings outstanding in the 
insurance category and that DBRS and KBRA have 
gained significant ratings share in the asset-backed 
securities category.25

a.	 NRSRO Credit Ratings Outstanding

Each NRSRO annually reports not later than 
March 31st the number of credit ratings 
outstanding, as of the end of the preceding calendar 

year, in each rating category for which it is regis-
tered.26 This information, for the calendar year 
ending December 31, 2021, is summarized in 
Charts 2 through 10 below and can be useful in 
determining the breadth of an NRSRO’s coverage 
with respect to issuers, obligors, and securities or 
money market instruments within a particular 
rating category:

	■ Chart 2 depicts the number of credit ratings 
each NRSRO had outstanding in each rating 
category for which it was registered as of 
December 31, 2021. 

	■ Chart 3 depicts the percentage of each NRSRO’s 
outstanding credit ratings of the total credit 
ratings outstanding in each category and overall.

	■ Chart 4 illustrates the relative size of each rating 
category based on the aggregate number of 
ratings reported outstanding by all NRSROs. 

	■ Chart 5 illustrates the percentage of ratings 
each NRSRO had outstanding across all rating 
categories. 



20  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

	■ Chart 6 illustrates the percentage of ratings 
each NRSRO had outstanding across all rating 
categories other than the government securities 
category.

	■ Chart 7 depicts the percentage of ratings each 
NRSRO had outstanding in the government 
securities category.

	■ Chart 8 depicts the change in the number of 
non-government ratings outstanding for each 
NRSRO over the prior five years.

	■ Chart 9 depicts the change in the number of 
non-government ratings outstanding for each 
small and medium NRSRO over the prior five 
years.

	■ Chart 10 depicts the change in the number of 
asset-backed securities ratings outstanding for 
each NRSRO over the prior five years.

While comparing the number of ratings 
outstanding among NRSROs provides a 
cumulative view on the state of competition over 
time,27 comparing the number of ratings issued by 
such NRSROs in a given period provides a more 
current picture of competition among NRSROs. 
Consequently, the information described in Charts 
8 through 10 (which show changes in ratings 
outstanding over a five year period) may provide an 
indication of how NRSROs have been competing 
in recent years. Additionally, the information 
described in Section IV.A.2 of this Report (relating 
to recent market share developments in the asset-
backed securities rating category), which provides 
information about ratings issued each year since 
2020, may provide additional insight regarding the 

27	 The ratings counts disclosed on Item 7A of Form NRSRO include outstanding credit ratings, regardless of when they were 
issued. As such, they reflect the rating activity of NRSROs over a period of years.

28	 For example, AMB has traditionally focused on rating insurance companies and their affiliates.
29	 An NRSRO identifies its credit rating affiliates on Item 3 of Form NRSRO.
30	 Effective January 1, 2015, Item 7A of Form NRSRO and the corresponding Instructions were amended to clarify the 

manner in which the number of outstanding credit ratings should be calculated and presented. The clarifying amendments 
were designed to help ensure that rating count disclosures are consistent across NRSROs. See Nationally Recognized 
Statistical Rating Organizations, Release No. 34-72936 (Aug. 27, 2014), 79 FR 55078, 55220-22 (Sept. 15, 2014) (2014 
Adopting Release), available at https://www.govinfo.gov/content/pkg/FR-2014-09-15/pdf/2014-20890.pdf (discussing the 
clarifying amendments with respect to Item 7 of Form NRSRO).

current competitive landscape among the NRSROs 
in the asset-backed securities rating category.

There are additional limitations to assessing the 
state of competition in each rating category and in 
the aggregate based on the number of outstanding 
ratings. For instance, some NRSROs have pursued 
business strategies to specialize in particular rating 
categories or sub-categories.28 Also, the reported 
information does not reflect any credit ratings being 
issued by NRSROs in rating categories in which 
they are not registered with the Commission, nor 
does it reflect ratings issued by an affiliate of an 
NRSRO unless the affiliate is identified as a credit 
rating affiliate.29

Further, when reporting its outstanding ratings, 
each NRSRO makes its own determination of the 
applicable rating category into which each of its 
ratings falls. The classification of ratings into the 
five rating categories is not necessarily consistent 
across NRSROs.30

Chart 2 provides the number of outstanding credit 
ratings reported by each NRSRO in its annual 
certification for the calendar year ending December 
31, 2021, in each of the five rating categories 
identified in Section 3(a)(62)(A) for which the 
NRSRO is registered, as applicable, as well as the 
percentage change in total ratings for each NRSRO 
from 2020 to 2021. Chart 3 displays the percentage 
of each NRSRO’s outstanding credit ratings of the 
total outstanding credit ratings of all NRSROs, 
for each rating category in which the NRSRO was 

https://www.govinfo.gov/content/pkg/FR-2014-09-15/pdf/2014-20890.pdf


	 S TA F F  R E P O R T   |   21

registered, as reported by each NRSRO in its annual 
certification for the calendar year ending December 

31	 For example, according to Chart 2, AMB reported that it had 7,286 insurance company credit ratings, and the total of 
the credit ratings in that category reported by all NRSROs was 20,962. Therefore, the percentage of NRSRO insurance 
company ratings attributable to AMB was approximately 34.8% (i.e., 7,286 divided by 20,962, expressed as a percentage), 
as shown on Chart 3.

31, 2021, as well as the percentage increase or 
decrease in total ratings from 2020 to 2021.31

Chart 2. Number of Outstanding Credit Ratings as of December 31, 2021 by Rating Category

NRSRO
Financial 

Institutions
Insurance 

Companies
Corporate 

Issuers

Asset-
Backed 

Securities

Government 
Securities

Total 
Ratings

Year-Over-Year Change 
in Total Ratings (2020 

to 2021)

AMB N/R 7,286 977 5 N/R 8,268 0.33%

DBRS 9,704 232 3,254 25,535 22,856 61,581 -0.31%

EJR 5,503 474 8,110 N/R N/R 14,087 -31.06%

Fitch 32,774 3,148 20,711 34,653 177,403 268,689 -0.01%

HR 789 N/R 558 N/R 455 1,802 8.49%

JCR 928 97 3,148 N/R 346 4,519 3.77%

KBRA 1,657 182 455 18,315 9,548 30,157 85.09%

Moody’s 34,003 2,624 33,203 50,815 562,211 682,856 0.70%

S&P 52,947 6,919 56,745 37,593 935,801 1,090,005 1.17%

Total 138,305 20,962 127,161 166,916 1,708,620 2,162,399 1.17%

N/R indicates that the NRSRO was not registered in the applicable rating category as of the reporting date.
Percentages have been rounded to the nearest one-hundredth of one percent.
Sources: NRSRO annual certifications for the 2020 and 2021 calendar years, Item 7A on Form NRSRO.

Chart 3. Percentage by Rating Category of Each NRSRO’s Outstanding Credit Ratings of  
the Total Outstanding Credit Ratings of all NRSROs as of December 31, 2021

NRSRO
Financial 

Institutions
Insurance 

Companies
Corporate 

Issuers

Asset-
Backed 

Securities

Government 
Securities

Total 
Ratings

Change in % of Total 
Ratings from 2020 to 

2021

AMB N/R 34.8% 0.8% <0.1% N/R 0.4% -0.02%

DBRS 7.0% 1.1% 2.6% 15.3% 1.3% 2.8% -0.22%

EJR 4.0% 2.3% 6.4% N/R N/R 0.7% -1.46%

Fitch 23.7% 15.0% 16.3% 20.8% 10.4% 12.4% -0.20%

HR 0.6% N/R 0.4% N/R <0.1% 0.1% 0.03%

JCR 0.7% 0.5% 2.5% N/R <0.1% 0.2% 0.03%

KBRA 1.2% 0.9% 0.4% 11.0% 0.6% 1.4% 0.94%

Moody’s 24.6% 12.5% 26.1% 30.4% 32.9% 31.6% 0.43%

S&P 38.3% 33.0% 44.6% 22.5% 54.8% 50.4% 0.47%

N/R indicates that the NRSRO was not registered in the applicable rating category as of the reporting date. 
Percentages have been rounded to the nearest one-hundredth of one percent.
Sources: NRSRO annual certifications for the 2020 and 2021 calendar years, Item 7A on Form NRSRO.



22  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

The large NRSROs accounted for 94.4% of 
all the ratings outstanding as of December 31, 
2021—slightly lower than their 94.7% share 
as of December 31, 2020.32 The aggregate 
share of outstanding credit ratings of the large 
NRSROs decreased in two of the five categories, 
most significantly in the asset-backed securities 
category, which decreased by about 2 percentage 
points. The large NRSROs as a group also 
lost a small amount of their aggregate share of 
outstanding credit ratings in the government 
securities category, which may be attributable, 
in part, to the significant increase in government 
ratings reported by KBRA. KBRA reported 9,548 
government ratings outstanding as of December 
31, 2021, compared to only 141 as of December 
31, 2020. However, given the large number of 
government ratings outstanding in the aggregate, 
KBRA’s government ratings outstanding reflect 
only 0.56% of the total government ratings.

Charts 2 and 3 also show that AMB, a medium 
NRSRO, had the most credit ratings outstanding 
in the insurance category. In each of the past eight 
years, AMB reported that it had the most credit 
ratings outstanding in the insurance category.33

Chart 4 depicts the percentages of outstanding 
credit ratings attributable to each rating category, 
as reported by the NRSROs in their annual 
certifications for the calendar year ending 
December 31, 2021. 

As illustrated by Chart 4, the largest proportion 
of the aggregate credit ratings reported to be 
outstanding were in the government securities 

32	 In 2007, the year when NRSROs began reporting outstanding ratings on Form NRSRO, the large NRSROs accounted for 
98.8% of all outstanding ratings.

33	 See 2021 Staff Report on NRSROs, which can be found under “Staff Reports on Nationally Recognized Statistical Rating 
Organizations” and the Annual Reports for prior years, which can be found under “Annual Reports to Congress” in the 
“Reports and Studies” section of the OCR webpage, available at https://www.sec.gov/ocr/ocr-reports-and-studies.html.

category, which may be attributable to the large 
number of government bond issuers (e.g., issuers 
of municipal securities) and their multiple debt 
offerings. The government securities category 
accounted for 79.0% of the total number of 
credit ratings reported across all categories and, 
as shown on Chart 3 and Chart 7, is also the 
most concentrated rating category, with the large 
NRSROs accounting for 98.1% of all outstanding 
government securities ratings. 

Chart 4. Breakdown of Ratings Reported 
Outstanding by Rating Category as of 
December 31, 2021

5.9%

7.7%

6.4%

79.0%
1.0%

Government Securities 79.0%

Asset-Backed Securities 7.7%

Financial Institutions 6.4%

Corporate Issuers 5.9%

Insurance Companies 1.0%

Percentages have been rounded to the nearest 
one-tenth of one percent. 
Sources: NRSRO annual certifications for the 2021 
calendar year, Item 7A on Form NRSRO.

https://www.sec.gov/ocr/ocr-reports-and-studies.html


	 S TA F F  R E P O R T   |   23

Chart 5 depicts the percentages of the credit ratings 
outstanding that are attributable to each NRSRO 
over all the rating categories; Chart 6 depicts the 
percentages of the credit ratings outstanding that 
are attributable to each NRSRO over all the rating 
categories other than the government securities 
category; and Chart 7 depicts the percentages of 
the credit ratings outstanding that are attributable 
to each applicable NRSRO in the government 
securities category, in each case, as reported by 
each NRSRO in its annual certification for the 
calendar year ending December 31, 2021. 

A comparison of Chart 5 to Chart 6 illus-
trates that there is less concentration in the 
non-government securities rating categories. 
S&P’s and Moody’s percentage share of all 

outstanding ratings declines by 16.4 and 5.0 
percentage points, respectively, when government 
securities are excluded. Fitch’s percentage share of 
outstanding ratings, on the other hand, increases 
by 7.7 percentage points when government 
securities are excluded. The percentage share for 
all the remaining NRSROs also increases when 
government securities are excluded. 

Further, when government securities are included 
in the total calculation, each of the small and 
medium NRSROs, except for DBRS and KBRA, 
has 0.7% or less of all outstanding ratings, 
making it difficult to assess their relative rating 
shares. When government securities are excluded, 
a clearer picture of the relative percentage 
shares of the small and medium NRSROs in 

Chart 5. Breakdown of Ratings Reported 
Outstanding by NRSRO as of December 31, 2021

12.4%

31.6%

2.8%

50.4%

1.4%

0.7%

0.4%

0.2%

0.1%

S&P 50.4%

Moody's 31.6%

Fitch 12.4%

DBRS 2.8%

KBRA 1.4%

EJR 0.7%

AMB 0.4%

JCR 0.2%

HR 0.1%

Percentages have been rounded to the nearest 
one-tenth of one percent. 
Sources: NRSRO annual certifications for the 2021 
calendar year, Item 7A on Form NRSRO.

Chart 6. Breakdown of Non-Government Securities 
Ratings Reported Outstanding by NRSRO as of 
December 31, 2021

8.5%

26.6%

20.1%

4.5%

34.0%

3.1%
1.8%

0.9%

0.3%

S&P 34.0%

Moody's 26.6%

Fitch 20.1%

DBRS 8.5%

KBRA 4.5%

EJR 3.1%

AMB 1.8%

JCR 0.9%

HR 0.3%

Percentages have been rounded to the nearest 
one-tenth of one percent. 
Sources: NRSRO annual certifications for the 2021 
calendar year, Item 7A on Form NRSRO.



24  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

the categories in which they are active can be 
observed, as illustrated in Chart 6. The percentage 
share of most of the small and medium NRSROs 
for all rating categories other than government 
securities as of December 31, 2021 did not change 
significantly compared to its percentage share as 
of December 31, 2020.34 The largest percentage 
share changes were KBRA, whose percentage 
share increased by 0.9%, and EJR whose 
percentage share declined by 1.5%. 

34	 A comparison of Chart 6 in this Report with Chart 11 in Section IV.A.1 of the 2021 Staff Report on NRSROs (available 
at https://www.sec.gov/files/2022-ocr-staff-report.pdf) shows that each small and medium NRSRO’s total non-government 
securities ratings share as of December 31, 2021 remained constant or increased modestly compared to the ratings shares 
as of December 31, 2020. 

Chart 8 depicts the change in ratings outstanding 
over a period of five years for all ratings other 
than ratings in the government securities category 
reported outstanding by NRSROs, as reported 
by each NRSRO in its annual certification for the 
calendar year ending December 31, 2017 through 
2021.

As illustrated in Chart 8, reported ratings 
outstanding has remained mostly steady across all 
NRSROs over the past five years and, consistent 
with the information shown in Chart 3 for the year 
ending December 31, 2021, the larger NRSROs 
have significantly more ratings outstanding than 
the medium and small NRSROs. While modest 
on the scale of ratings outstanding by the large 
NRSROs, Chart 8 shows a steady increase in 
ratings outstanding for both DBRS and KBRA over 
the past five years. The extent of this increase for 
DBRS and KBRA is more apparent when viewing 
changes in ratings outstanding on a scale that 
includes only the medium and small NRSROs, as 
illustrated in Chart 9.

Chart 10 depicts the change in ratings outstanding 
over a period of five years for all ratings in the 
asset-backed securities rating class reported 
outstanding by NRSROs.

As discussed in more detail in Section IV.A.2, 
medium NRSROs have been able to make inroads 
in the asset-backed securities rating class. Chart 10 
provides a graphic representation of the increased 
competition in this rating class since 2017. Both 
DBRS and KBRA have steadily increased the 
number of ratings reported outstanding over the 

Chart 7. Breakdown of Government Securities 
Ratings Reported Outstanding on December 31, 2021

32.90%

54.77%

10.38%

0.56%

0.03%

0.02%

1.34%

S&P 54.77%

Moody's 32.90%

Fitch 10.38%

DBRS 1.34%

KBRA 0.56%

HR 0.03%

JCR 0.02%

Percentages have been rounded to the nearest 
one-hundredth of one percent. 
This chart only includes the NRSROs that are registered 
in the government securities category. 
Sources: NRSRO annual certifications for the 2021 
calendar year, Item 7A on Form NRSRO.



	 S TA F F  R E P O R T   |   25

past five years. While Moody’s and S&P continue 
to report the most ratings outstanding in this 
class, the number of outstanding ratings reported 
by these NRSROs is lower in 2021 as compared 

to 2017. Fitch’s number of ratings has increased 
since 2017, and ratings counts for each of Fitch, 
Moody’s, and S&P have remained fairly steady in 
recent years. 

Chart 8. Total Non-Government Ratings Issued by All NRSROs as of December 31, 2021

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

20212020201920182017

DBRS

EJR

Fitch

HR
AMB JCR

KBRA

Moody’s

S&P

Chart 9. Total Non-Government Ratings Issued by Medium and Small NRSROs as of December 31, 2021

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

20212020201920182017

DBRS

EJR

HR

JCR

KBRA

AMB



26  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

b.	 NRSRO Analytical Staffing Levels

Chart 11 reports the number of credit analysts 
(including credit analyst supervisors) and the 
number of credit analyst supervisors employed by 
each of the NRSROs, as reported on Exhibit 8 to 
Form NRSRO.35

The large NRSROs report employing 4,535 credit 
analysts (including supervisors), which is approxi-
mately 81.6% of the total number employed by all 
of the NRSROs. The small and medium NRSROs, 
in the aggregate, employ approximately 18.4% of 
all credit analysts employed by NRSROs.36 Total 
NRSRO analytical staff declined by about 1% 
compared to the information reported in the prior 
year annual certifications.

35	 Effective January 1, 2015, the Instructions for Exhibit 8 to Form NRSRO were amended to clarify that NRSROs must 
include credit analyst supervisors in the total number of credit analysts disclosed on Exhibit 8. This amendment was 
designed to enhance consistency of the disclosures on Exhibit 8 of Form NRSRO. See 2014 Adopting Release, 79 FR at 
55222 (discussing the clarifying amendments to Exhibit 8 of Form NRSRO).

36	 Based on reports by the NRSROs on their annual certifications for the applicable calendar year, the small and medium 
NRSROs, in the aggregate, employed approximately 11.4% of all NRSRO analysts in 2014, 12.8% of all NRSRO 
analysts in 2015, 14.6% of all NRSRO analysts in 2016, 15.2% of all NRSRO analysts in 2017, 15.4% of all NRSRO 
analysts in 2018, 17.0% of all NRSRO analysts in 2019, and 16.3% of all NRSRO analysts in 2020. 

Chart 10. Total ABS Ratings Issued by All NRSROs as of December 31, 2021

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

20212020201920182017

DBRS

Fitch

KBRA

Moody’s

S&P

Chart 11. NRSRO Credit Analysts and  
Credit Analyst Supervisors

NRSRO
Credit Analysts 

(Including Credit 
Analyst Supervisors)

Credit Analyst 
Supervisors

AMB 155 62

DBRS 507 87

EJR 21 11

Fitch 1,288 330

HR 58 10

JCR 60 29

KBRA 214 59

Moody’s 1,670 256

S&P 1,577 127

Total 5,550 971

Sources: Exhibit 8 to Form NRSRO, in effect as of each 
NRSRO’s annual certification for the 2021 calendar year 
filed on or before March 31, 2022.



	 S TA F F  R E P O R T   |   27

c.	 NRSRO Revenue

Chart 12 shows the percentage of total NRSRO 
revenues attributable to the large, medium, and 
small NRSROs since 2018.37 Changes to the 
composition of certain registered NRSROs in 
recent years may limit the comparability of the 
revenue distribution across the years.38 Nonetheless, 
observations of changes to the distribution of 
revenue may provide some insight into the overall 
competitive landscape. Following a small increase 
in fiscal year 2020, the percentage of aggregate 
NRSRO revenue reported by the large NRSROs 
has fallen below the level reported for fiscal year 
2019. The revenue share of the medium NRSROs 
has generally remained steady since 2018. In fiscal 
year 2021, the medium NRSROs regained most of 
the share of revenue lost in 2020, a year impacted 
by the onset of and response to COVID-19. The 
small NRSROs’ share of overall NRSRO revenue 

37	 Pursuant to Rule 17g-3(a)(3), each NRSRO is required to file annually with the Commission an unaudited revenue report, 
which includes revenue received from determining and maintaining credit ratings, subscribers and subscription services, 
granting licenses or rights to publish credit ratings, and other services and products. NRSROs are not required to make 
these revenue reports publicly available. 

38	 Following its acquisition of DBRS in July 2019, Morningstar, Inc. began to integrate the businesses of DBRS and 
Morningstar Credit Ratings, LLC (MCR), which at the time was also registered as an NRSRO. Effective December 30, 
2019, MCR withdrew its registration as an NRSRO. MCR continued to operate as a credit rating affiliate of DBRS until 
November 23, 2020.

39	 See Moody’s Corporation, Annual Report on Form 10-K for the year ended December 31, 2021, available at https://www.
sec.gov/ix?doc=/Archives/edgar/data/0001059556/000105955622000012/mco-20211231.htm. 

has also remained consistent over this time 
period, and increased by 0.3% in fiscal year 2021. 
Although this percentage increase is modest in 
terms of aggregate revenue across all NRSROs, it 
represents a 50% increase in revenue attributable 
to the small NRSROs compared to fiscal years 
2020 and 2019.

Further revenue information is available for 
NRSROs that are owned, in whole or in part, by 
public companies. The following information is 
from the 2021 annual reports of public companies 
with an ownership interest in an NRSRO:

	■ Moody’s Corporation, which is Moody’s parent 
company, reported $3.8 billion in Moody’s 
external revenue for 2021, a 16% increase from 
2020. This increase, according to the report, 
was due to strong growth mainly driven by 
leveraged finance issuance, as issuers refinanced 
existing debt and funded merger and acquisition 
activity, and increased collateralized loan 
obligation and commercial mortgage-backed 
securities activity amid favorable market 
conditions. The corporate finance group, 
financial institutions group, public, project and 
infrastructure finance group, and structured 
finance group of Moody’s had an increase in 
revenue compared to 2020 results.39

	■ S&P Global Inc. (S&P Global), which is S&P’s 
parent company, reported $4.1 billion in S&P’s 
revenue for 2021, a 14% increase from 2020. 
This increase, according to the report, was 
due to higher bank loan ratings revenue and 

Chart 12. NRSRO Fiscal Year Revenue as a  
Percentage of Aggregate Reported Revenue

2021 2020 2019 2018

Large NRSROs 93.2% 94.1% 93.3% 93.5%

Medium NRSROs 5.6% 5.1% 5.9% 5.9%

Small NRSROs 1.1% 0.8% 0.8% 0.7%

Percentages have been rounded to the nearest 
one-tenth of one percent. 
Sources: Financial reports filed with the Commission 
under Rule 17g-3(a)(3) for fiscal years ended 2019 
through 2021. For the preparation of this Report, if an 
NRSRO reported revenue in a foreign currency, the 
revenue was converted to U.S. dollars using the average 
exchange rate over all U.S. banking days in the fiscal 
year of such NRSRO.

https://www.sec.gov/ix?doc=/Archives/edgar/data/0001059556/000105955622000012/mco-20211231.htm
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001059556/000105955622000012/mco-20211231.htm


28  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

structured finance revenue. Non-transaction 
revenue increased primarily due to an increase 
in surveillance, entity credit ratings, subsidiary 
revenue, and higher revenue from S&P’s 
Ratings Evaluation Service, an analytical tool 
for entities that are considering strategic or 
financial initiatives that could impact their 
creditworthiness.40

	■ Morningstar, Inc., which is DBRS’s parent 
company, reported $271 million in revenue 
from DBRS, a 30.8% increase in revenue from 
2020. This increase, according to the report, 
was due to robust commercial and residential 
mortgage-backed securities issuance, growth 
from fundamental ratings, expansion into 
U.S. and European corporate middle markets, 
and increased issuance in Canadian non-bank 
financials. Transaction-based revenue from 
one-time, transaction-based fees for ratings 
on newly-issued securities grew 31.2% in 
2021, which represented 65.7% of the revenue 
generated by DBRS. The remainder is classified 
as transaction-related revenue or revenue 
generated by annual fees tied to surveillance, 
research, and other services.41

Recent regulatory filings show a decline in revenues 
at Moody’s and S&P in the first half of 2022. 
Moody’s Corporation reported $1.5 billion in 
Moody’s external revenue for the first half of 2022, 
a 24% decrease compared with the same period 
in 2021. This decrease, according to the report, 
was due to declines in leveraged finance (high-yield 

40	 See S&P Global Inc., Annual Report on Form 10-K for the year ended December 31, 2021, available at https://www.sec.
gov/ix?doc=/Archives/edgar/data/0000064040/000006404022000055/spgi-20211231.htm.

41	 See Morningstar, Inc., Annual Report on Form 10-K for the year ended December 31, 2021, available at https://www.sec.
gov/ix?doc=/Archives/edgar/data/1289419/000128941922000005/morn-20211231.htm.

42	 See Moody’s Corporation, Quarterly Report on Form 10-Q for the period ended June 30, 2022, available at https://www.
sec.gov/ix?doc=/Archives/edgar/data/0001059556/000105955622000051/mco-20220630.htm.

43	 See S&P Global Inc., Quarterly Report on Form 10-Q, for the period ended June 30, 2022, available at https://www.sec.
gov/ix?doc=/Archives/edgar/data/0000064040/000006404022000143/spgi-20220630.htm. 

44	 See Morningstar, Inc., Quarterly Report on Form 10-Q for the period ended June 30, 2022, available at https://www.sec.
gov/ix?doc=/Archives/edgar/data/1289419/000128941922000014/morn-20220630.htm.

corporate debt and bank loans) issuance resulting 
from market volatility relating to macroeconomic 
uncertainties, rising borrowing costs, and the 
Russia-Ukraine conflict.42

S&P Global reported $1.6 billion in revenue at 
S&P for the first half of 2022, a 20% decrease 
compared with the same period in 2021. This 
decrease, according to the report, was due to an 
unfavorable impact from foreign exchange rates, 
lower corporate bond ratings revenue driven by 
a decrease in high-yield and investment-grade 
issuance volumes, lower bank loan ratings 
revenue, decreased issuance of U.S. collateralized 
loan obligations, and reduced issuance volumes 
resulting from unfavorable macroeconomic condi-
tions in 2022.43 

Morningstar, Inc. reported $134.4 million in DBRS 
revenue for the first half of 2022, a 7.8% increase 
compared with the same period in 2021. This 
increase, according to the report, was achieved 
despite softer issuance across most geographies and 
asset classes. Additionally, while there was strong 
growth in commercial mortgage-backed securities 
issuance, this was partially offset by declines in 
asset-backed securities, residential mortgage-backed 
securities, and corporate and financial institution 
ratings. Finally, structured finance issuance slowed 
sharply due to the geopolitical environment and 
increased interest-rate volatility and liquidity 
premiums in Europe.44 

https://www.sec.gov/ix?doc=/Archives/edgar/data/0000064040/000006404022000055/spgi-20211231.htm
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000064040/000006404022000055/spgi-20211231.htm
https://www.sec.gov/ix?doc=/Archives/edgar/data/1289419/000128941922000005/morn-20211231.htm
https://www.sec.gov/ix?doc=/Archives/edgar/data/1289419/000128941922000005/morn-20211231.htm
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001059556/000105955622000051/mco-20220630.htm
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001059556/000105955622000051/mco-20220630.htm
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000064040/000006404022000143/spgi-20220630.htm
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000064040/000006404022000143/spgi-20220630.htm
https://www.sec.gov/ix?doc=/Archives/edgar/data/1289419/000128941922000014/morn-20220630.htm
https://www.sec.gov/ix?doc=/Archives/edgar/data/1289419/000128941922000014/morn-20220630.htm


	 S TA F F  R E P O R T   |   29

2.	 �Market Share Observations in the Asset-

Backed Securities Rating Category

As noted in Section IV.A.1.a of this Report, the 
number of ratings recently issued by NRSROs 
may give a clearer picture of competition than 
the number of ratings each NRSRO currently has 
outstanding. For example, Chart 3 indicates that, 
as of December 31, 2021, DBRS and KBRA, the 
only medium or small NRSROs that actively rate 
asset-backed securities,45 collectively had 26.3% 
of the ratings outstanding in the asset-backed 
securities rating category, which increased from 
24.3% as of December 31, 2020. However, 
the market share data discussed in this Section 
IV.A.246 shows that even higher market share 
percentages have been obtained by DBRS and 
KBRA in recent years for ratings issuance with 
respect to certain types of asset-backed securities. 

45	 EJR, HR, and JCR are not registered with the Commission in the asset-backed securities category. See Chart 1. While 
AMB is registered to rate asset-backed securities, as shown in Chart 2, it only has five outstanding asset-backed securities 
ratings as of December 31, 2021, all of which were issued before 2019. For these reasons, this section only discusses 
observations related to DBRS, Fitch, KBRA, Moody’s, and S&P, which are the five NRSROs registered in the asset-backed 
securities category with current asset-backed securities rating activity.

46	 Unless noted otherwise, all market share percentages in this Section IV.A.2 are based on dollar amounts of issuance.
47	 Prior to being integrated with DBRS, MCR also actively rated asset-backed securities.
48	 See Commercial Mortgage Alert website, available at https://www.greenstreet.com/news/commercial-mortgage-alert and 

Asset-Backed Alert website, available at https://www.greenstreet.com/news/asset-backed-alert. The information in Charts 
13 through 16 is based on information from the Commercial Mortgage Alert’s CMBS database as of August 5, 2022, and 
the information in Charts 17 through 19 and the accompanying discussion is based on information from the Asset-Backed 
Alert’s ABS database as of August 5, 2022. Although analysis of the information from the databases may provide insight 
into recent developments regarding the state of competition among NRSROs in the asset-backed securities rating category, 
it has certain limitations. For instance, the information treats each transaction as one undivided whole. An NRSRO is 
counted as having rated a transaction, and the aggregate amount of securities issued, even if the NRSRO rated only a 
portion of it.

49	 Based on information about the databases available on the Asset-Backed Alert and Commercial Mortgage Alert websites, 
references to “U.S.” CMBS, MBS, ABS, and CLO issuance and market shares in this Section IV.A.2 reflect securities 
issued for sale primarily in the U.S., which include securities issued publicly and those issued under Rule 144A under the 
Securities Act of 1933 (the Securities Act).

50	 Based on information about the database available on the Commercial Mortgage Alert website, the “CMBS” category 
is comprised of transactions secured by a static pool of mortgages or leases on income producing properties, either 
commercial or multi-family.

51	 The term “conduit” refers to a financial intermediary that functions as a link, or conduit, between the lender(s) originating 
loans and the ultimate investor(s). The conduit makes loans or purchases loans from third party correspondents under 
standardized underwriting parameters and once sufficient volume has accumulated, pools the loans for sale to investors 
in the CMBS market. See https://www.crefc.org/uploadedFiles/Site_Framework/Industry_Resources/Glossary%20
Revised%202014%20-Update.pdf. In contrast, a single-borrower transaction includes commercial mortgage loans made 
to a single borrower. 

This market share data continues the growth 
trend the Staff has observed since 2011 for some 
medium NRSROs47 in the asset-backed securities 
rating category. 

Section IV.A.2.a and 2.b below discuss NRSRO 
market share information with respect to certain 
asset-backed securities, based on information 
from the databases available on the Commercial 
Mortgage Alert and Asset-Backed Alert websites.48

a.	 CMBS

Charts 13 through 16 provide information 
concerning U.S.49 CMBS50 ratings by NRSROs, 
based on information from the Commercial 
Mortgage Alert database. NRSRO market share 
varies between the conduit CMBS and single-
borrower CMBS segments,51 the two segments 

https://www.greenstreet.com/news/commercial-mortgage-alert 
https://www.greenstreet.com/news/asset-backed-alert
https://www.crefc.org/uploadedFiles/Site_Framework/Industry_Resources/Glossary%20Revised%202014%20-Update.pdf
https://www.crefc.org/uploadedFiles/Site_Framework/Industry_Resources/Glossary%20Revised%202014%20-Update.pdf


30  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

that account for most of the non-agency52 U.S. 
CMBS transactions rated by NRSROs. The charts 
include reported market share information for total 
non-agency U.S. CMBS transactions,53 U.S. conduit 

52	 “Non-agency” CMBS refers to CMBS that are not issued or guaranteed by Fannie Mae, Freddie Mac, or Ginnie Mae. 
“Agency” CMBS generally refers to CMBS that are issued or guaranteed by such entities. 

53	 Total U.S. CMBS transactions include single-borrower CMBS, conduit CMBS, and other types of CMBS, such as large 
loan and small-balance/legacy conduit CMBS transactions.

54	 Only agency CMBS transactions with a rating from one or more NRSROs are included for determining NRSRO market 
share in the agency CMBS category.

55	 The market share percentage for each NRSRO in Charts 13 through 16 reflects the total amount rated by the NRSRO as 
a percentage of the total amount rated by all the NRSROs that assigned ratings. Market share percentages are provided 
based on both dollar amounts of issuance and number of deals rated. The sum of the market share percentages exceeds 
100% because it is typical for more than one NRSRO to rate a particular transaction. Likewise, the aggregate issuance 
volume and number of deals represented above exceed the Total Rated Market values for each time period. The source of 
the data for these charts is the Commercial Mortgage Alert’s CMBS database as of August 5, 2022.

CMBS transactions, U.S. single-borrower CMBS 
transactions, and agency CMBS transactions54 for 
the first half of calendar year 2022 and calendar 
years 2021 and 2020.55

Chart 13. Rating Agency Market Shares for Total Non-Agency U.S. CMBS Issued in 2020, 2021, and  
First Half of 2022

1H-2022 
Rank

NRSRO
1H-2022 
Issuance  
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

2021 
Issuance 
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

2020 
Issuance 
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

1 Moody’s 34,989 35 71.0/63.6 38,342 45 34.7/31.7 25,076 42 46.3/50.0

2 Fitch 23,485 23 47.7/41.8 57,361 60 51.9/42.3 38,037 46 70.2/54.8

3 DBRS 23,197 23 47.1/41.8 56,655 71 51.2/50.0 21,893 34 40.4/40.5

4 KBRA 16,614 16 33.7/29.1 46,466 47 42.0/33.1 25,825 32 47.7/38.1

5 S&P 11,485 14 23.3/25.5 45,885 55 41.5/38.7 18,176 23 33.6/27.4

Total Rated Market 49,266 55 110,557 142 54,155 88

Chart 14. Rating Agency Market Shares for U.S. Conduit CMBS Issued in 2020, 2021, and First Half of 2022

1H-2022 
Rank

NRSRO
1H-2022 
Issuance  
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

2021 
Issuance 
($Mil.)

No. of 
deals

Market 
Share %  
($)/(#)

2020 
Issuance 
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

1 Fitch 16,105 16 100.0/100.0 31,428 32 100.0/100.0 26,953 30 100.0/100.0

2 KBRA 10,124 10 62.9/62.5 25,809 26 82.1/81.3 17,400 20 64.6/66.7

3 Moody’s 8,258 8 51.3/50.0 6,771 7 21.5/21.9 11,457 15 42.5/50.0

4 DBRS 8,135 8 50.5/50.0 6,984 7 22.2/21.9 9,553 10 35.4/33.3

5 S&P 7,358 7 45.7/43.8 22,906 22 72.9/68.8 14,769 14 54.8/46.7

Total Rated Market 16,105 16   31,428 32   26,953 30  



	 S TA F F  R E P O R T   |   31

Chart 15. Rating Agency Market Shares for U.S. Single-Borrower CMBS Issued in 2020, 2021, and  
First Half of 2022

1H-2022 
Rank

NRSRO
1H-2022 
Issuance  
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

2021 
Issuance 
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

2020 
Issuance 
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

1 Moody’s 26,454 26 80.4/68.4 31,571 38 39.9/34.5 11,388 23 47.9/48.9

2 DBRS 15,062 15 45.8/39.5 49,671 64 62.8/58.2 10,108 20 42.5/42.6

3 Fitch 7,379 7 22.4/18.4 25,933 28 32.8/25.5 8,582 12 36.1/25.5

4 KBRA 6,213 5 18.9/13.2 20,657 21 26.1/19.1 7,231 9 30.4/19.1

5 S&P 4,127 7 12.6/18.4 22,979 33 29.9/30.0 3,154 8 13.3/17.0

Total Rated Market 32,884 38 79,128 110 23,776 47

Chart 16. Rating Agency Market Shares for Agency CMBS Issued in 2020, 2021, and First Half of 2022

1H-2022 
Rank

NRSRO
1H-2022 
Issuance  
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

2021 
Issuance 
($Mil.)

No. of 
deals

Market 
Share %  
($)/(#)

2020 
Issuance 
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

1 Fitch 9,484 8 60.4/61.5 22,469 19 94.9/95.0 26,820 21 90.9/91.3

2 KBRA 8,406 7 53.6/53.8 7,538 7 31.8/35.0 14,480 11 49.1/47.8

3 DBRS 7,286 6 46.4/46.2 16,147 13 68.2/65.0 15,011 12 50.9/52.2

4 Moody’s 6,208 5 39.6/38.5 1,216 1 5.1/5.0 2,671 2 9.1/8.7

Total Rated Market 15,692 13 23,684 20 29,491 23

Charts 13 through 16 show that in 2020, 2021, 
and the first half of 2022 the large NRSROs 
generally held a large percentage of the market 
shares in rating non-agency U.S. CMBS transac-
tions, but DBRS and KBRA have achieved signif-
icant market shares as well. 

As illustrated in Chart 13, in the first half of 2022, 
DBRS and KBRA had the third- and fourth-highest 
market shares, respectively, in the non-agency 
U.S. CMBS segment. In 2021, DBRS was closely 
behind Fitch for the second-highest market share, 
significantly increasing its market share since 2020. 
KBRA has consistently attained a market share 
over 34% since 2020, and in 2021 KBRA obtained 
a higher market share than Moody’s or S&P.

As of the first half of 2022, the U.S. conduit 
CMBS segment represented approximately 30% 
of the non-agency U.S. CMBS transactions. Since 
2020, Fitch has maintained the highest market 
share in the U.S. conduit CMBS segment, rating 
all transactions. However, as illustrated in Chart 
14, KBRA has maintained the second-highest 
market share, measured by both dollar value of 
issuance and number of deals rated, in the U.S. 
conduit CMBS segment since 2020. Additionally, 
as of the first half of 2022, DBRS has rated just 
over half of these transactions. 

In 2021 and the first half of 2022, the relative size 
of the U.S. single-borrower segment was approxi-
mately two-thirds of all non-agency U.S. CMBS 



32  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

transactions. As illustrated in Chart 15, DBRS has 
achieved significant market share in this segment, 
achieving the highest market share in 2021 and 
the second-highest for 2020 and the first  
half of 2022. 

As illustrated in Chart 16, Fitch had the highest 
market share in the agency CMBS segment  
during 2020 and 2021. However, over the same 
period, DBRS and KBRA had the second and 
third highest market shares, respectively, and 
KBRA and DBRS had the second and third 
highest market shares, respectively, for the first 
half of 2022. 

56	 Based on information about the database available on the Asset-Backed Alert website, the “ABS” category is comprised 
of securities that are collateralized by assets other than the following: CMBS; MBS; CLOs; collateral debt obligations 
collateralized primarily by other securities; issuances by municipalities; tax exempt issues; issues that are fully retained by 
an affiliate of the deal sponsor or sold to a commercial paper-conduit operated by an affiliate of the sponsor; commercial 
paper and other continuously offered securities such as medium-term notes; and refinancing of previously offered 
securities.

57	 Based on information about the database available on the Asset-Backed Alert website, the “MBS” category is comprised of 
registered securities backed by U.S. first-lien residential properties (typically jumbo mortgages that would otherwise meet 
the criteria of Fannie Mae and Freddie Mac) and Alt-A home loans. 

58	 Based on information about the database available on the Asset-Backed Alert website, the “CLO” category is comprised 
of deals that take the form of collateralized loan obligations (exclusive of collateralized debt obligations collateralized 
primarily by other securities). In the period reviewed, these consisted of deals involving corporate loan arbitrage, small 
business/SME loans, and commercial real estate loans.

59	 The market share percentage for each NRSRO in Charts 17 through 19 reflects the total amount rated by the NRSRO as 
a percentage of the total amount rated by all the NRSROs that assigned ratings. Market share percentages are provided 
based on both dollar amounts of issuance and number of deals rated. The sum of the market share percentages exceeds 
100% because it is typical for more than one NRSRO to rate a particular transaction. Likewise, the aggregate issuance 
volume and number of deals represented above exceed the Total Rated Market values for each time period. The source of 
the data for these charts is the Asset-Backed Alert’s ABS database as of August 5, 2022.

b.	 ABS/MBS/CLO

Charts 17 through 19 provide information 
concerning U.S. ABS,56 U.S. MBS,57 and U.S. 
CLO58 ratings by NRSROs, based on information 
from the Asset-Backed Alert database. The charts 
include reported market share information for 
these transactions for the first half of calendar 
year 2022 and calendar years 2021 and 2020.59

Chart 17 shows that DBRS and KBRA have gained 
and maintained significant U.S. ABS rating market 
shares. Since 2020, KBRA has grown its market 
share, and DBRS has consistently attained a market 
share of over 20%.

Chart 17. Rating Agency Market Shares for U.S. ABS Issued in 2020, 2021, and First Half of 2022

1H-2022 
Rank

NRSRO
1H-2022 
Issuance  
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

2021 
Issuance 
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

2020 
Issuance 
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

1 S&P 111,577 142 52.0/39.0 192,962 291 49.2/43.0 159,660 240 58.3/47.9

2 Moody’s 87,172 112 40.7/30.8 171,700 199 43.7/29.4 114,382 157 41.8/31.3

3 Fitch 79,980 115 37.3/31.6 135,558 177 34.5/26.1 109,286 151 39.9/30.1

4 KBRA 73,697 155 34.4/42.6 101,188 252 25.8/37.2 50,550 139 18.5/27.7

5 DBRS 43,541 99 20.3/27.2 123,106 233 31.4/34.4 76,125 168 27.8/33.5

Total Rated Market 214,373 364 392,476 677 273,685 501



	 S TA F F  R E P O R T   |   33

DBRS and KBRA have been able to gain market 
share in rating more traditional types of ABS. For 
example, in 2021 and the first half of 2022, DBRS 
rated 90.2% and 92.2% of transactions backed 
by student loans, which represented the highest 
market share. Likewise, in 2021 and the first half 
of 2022, KBRA rated 78.7% and 85% of trans-
actions backed by small business loans, which 
represented the highest market share.60

Both DBRS and KBRA have maintained a signif-
icant market share in certain auto-related asset-
backed securities. In 2021, DBRS rated 47.6% 
of the auto-fleet lease transactions, 33.1% of the 
subprime auto loan transactions, and 17.8% of 
the auto lease transactions. KBRA also maintained 
a significant market share in the subprime auto 
loan transactions, rating 35.1% of such transac-
tions during 2021. This has largely continued 
into the first half of 2022, as DBRS rated 6.9% 
of the auto-fleet lease transactions, 31.7% of 
the subprime auto loan transactions, and 11.1% 

60	 Asset-Backed Alert’s ABS database indicates that 50 student loan transactions totaling $32.3 billion and eight small-
business loan transactions totaling $1.2 billion were priced during 2021. Eight student loan transactions totaling $5.6 
billion and eight small-business loan transactions totaling $1.8 billion were priced during the first half of 2022.

61	 Asset-Backed Alert’s ABS database indicates that the following transactions were priced during 2021: 13 auto-fleet 
lease transactions totaling $10.5 billion, 68 subprime auto loan transactions totaling $43.5 billion, and five auto lease 
transactions totaling $3.3 billion. The following transactions were priced during the first half of 2022: 15 auto-fleet lease 
transactions totaling $7.1 billion, 37 subprime auto loan transactions totaling $20.7 billion, and 18 auto lease transactions 
totaling $16.4 billion

of the auto lease transactions, and KBRA rated 
42.7% of the subprime auto loan transactions.61

Chart 18 shows that the U.S. MBS segment 
remains competitive. KBRA’s market share has 
increased from 34.5% in 2020 to 75.9% in the 
first half of 2022, although DBRS’ market share 
has decreased from 36.2% in 2020 to 10.4% in 
the first half of 2022. DBRS and KBRA have, 
however, achieved notable market share in certain 
types of ABS related to the residential housing 
market, but not considered to be MBS under 
the Asset-Backed Alert database’s criteria. For 
example, DBRS rated 76.9% of the re-performing 
mortgage transactions that priced in the first 
half of 2022. Additionally, KBRA and DBRS 
were active rating securities backed by subprime 
mortgages and risk transfer securities during 
the first half of 2022. For securities backed by 
subprime mortgages, KBRA rated 60.4% and 
DBRS rated 19.6% that priced during the first 
half of 2022; for risk transfer securities, KBRA 

Chart 18. Rating Agency Market Shares for U.S. MBS Issued in 2020, 2021, and First Half of 2022

1H-2022 
Rank

NRSRO
1H-2022 
Issuance  
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

2021 
Issuance 
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

2020 
Issuance 
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

1 KBRA 23,065 41 75.9/69.5 41,100 86 47.5/47.8 10,311 24 34.5/30.4

2 Moody’s 21,449 39 70.5/66.1 62,825 112 72.5/62.2 14,642 31 49.0/39.2

3 Fitch 15,488 27 50.9/45.8 32,996 75 38.1/41.7 14,755 46 49.4/58.2

4 DBRS 3,177 6 10.4/10.2 19,609 33 22.6/18.3 10,810 24 36.2/30.4

5 S&P 1,699 4 5.6/6.8 6,130 15 7.1/8.3 2,491 7 8.3/8.9

Total Rated Market 30,407 59 86,599 180 29,883 79



34  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

rated 78.2% and DBRS rated 21.8% that priced 
during the first half of 2022.62

As shown in Chart 19, DBRS and KBRA have 
attained a foothold in the U.S. CLO segment, 
although S&P, Moody’s, and Fitch have had the 
highest market shares since 2020.

In addition to the more traditional categories of 
asset-backed securities classes discussed above, 
DBRS and KBRA have gained significant market 
share in some newer or more esoteric classes of 
asset-backed securities. For example, DBRS and 
KBRA are significant raters of securities backed 
by unsecured consumer loans, including consumer 
loans originated through marketplace lending 
platforms. DBRS and KBRA had the two highest 
market shares in this category in 2021 and the 
first half of 2022, both rating over 44% of the 

62	 Asset-Backed Alert’s ABS database indicates that 15 re-performing mortgage transactions totaling $7.6 billion, 61 
subprime mortgage transactions totaling $24.1 billion, and 15 risk transfer transactions totaling $18.3 billion were priced 
during the first half of 2022.

63	 Asset-Backed Alert’s ABS database indicates that 73 unsecured consumer loan transactions totaling $26.8 billion were 
priced during 2021, and 44 unsecured consumer loan transactions totaling $13.2 billion were priced during the first half of 
2022.

64	 Asset-Backed Alert’s ABS database indicates that 16 aircraft-lease receivable transactions totaling $9.1 billion were priced 
during 2021, and two aircraft-lease receivable transactions totaling $1.1 billion were priced during the first half of 2022.

65	 Asset-Backed Alert’s ABS database indicates that 19 whole-business securitization transactions totaling $13.9 billion were 
priced during 2021, and 11 whole business securitization transactions totaling $5.2 billion were priced during the first half 
of 2022.

transactions priced during this period. Compara-
tively, Moody’s, S&P, and Fitch each rated less 
than 30% of these transactions over the same time 
period.63 

There are additional examples of market share 
gains achieved by a medium NRSRO in discrete 
asset classes. For instance, KBRA rated 85.0% and 
100% of the aircraft-lease receivables transactions 
that priced during 2021 and the first half of 2022, 
respectively, while Moody’s, S&P, and Fitch each 
rated less than 55% of these transactions over the 
same time period.64 KBRA was also active rating 
whole-business securitizations during 2021 and the 
first half of 2022, rating 60.2% and 90.5%, respec-
tively, of the issuance amount of such transactions. 
While S&P had a greater market share for 2021 
(rating 75% of the transactions), KBRA had the 
highest market share for the first half of 2022.65 

Chart 19. Rating Agency Market Shares for U.S. CLOs Issued in 2020, 2021, and First Half of 2022

1H-2022 
Rank

NRSRO
1H-2022 
Issuance  
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

2021 
Issuance 
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

2020 
Issuance 
($Mil.)

No. of 
deals

Market 
Share % 
($)/(#)

1 Moody’s 49,994 104 66.7/64.2 93,606 192 48.2/48.9 18,890 45 20.1/20.1

2 Fitch 35,416 72 47.3/44.4 39,195 76 20.2/19.3 32,815 72 35.0/32.1

3 S&P 28,877 62 38.5/38.3 101,931 207 52.5/52.7 81,589 193 87.0/86.2

4 KBRA 2,364 7 3.2/4.3 12,979 25 6.7/6.4 3,541 10 3.8/4.5

5 DBRS 151 3 0.2/1.9 3,227 4 1.7/1.0 330 1 0.4/0.4

Total Rated Market 74,953 162 194,333 393 93,785 224



	 S TA F F  R E P O R T   |   35

3.	 Barriers to Entry

Barriers to entry continue to exist in the credit 
ratings industry, presenting competitive challenges 
for the small and medium NRSROs.

One such potential barrier that has been raised 
by certain small and medium NRSROs are 
the investment management contracts of some 
institutional fund managers and the investment 
guidelines of some fixed income mutual fund 
managers, pension plan sponsors, and endowment 
fund managers, which require the use of ratings 
of specified rating agencies.66 The effect of these 
requirements can be to increase the demand for 
and liquidity of securities bearing the ratings of 
specified rating agencies, which may provide an 
incentive for issuers to obtain ratings from the 
specified agencies. Historically, many of these 
guidelines refer to the ratings from the large 
NRSROs by name (i.e., Fitch, Moody’s, and 
S&P). Despite reports that investors are increas-
ingly changing their guidelines to allow for 
investments in securities rated by a wider group 

66	 See Statement of Jim Nadler, President and CEO, Kroll Bond Rating Agency, Bond Rating Agencies: Examining the 
“Nationally Recognized” Statistical Rating Organizations Hearing Before the Subcommittee on Investor Protection, 
Entrepreneurship and Capital Markets of the House Committee on Financial Services, 117th Congress (July 21, 2021), 
available at https://democrats-financialservices.house.gov/UploadedFiles/HHRG-117-BA16-Wstate-NadlerJ-20210721.
pdf; see also Letter from KBRA to the Commission (Aug. 19, 2014), available at https://www.sec.gov/comments/s7-18-11/
s71811-88.pdf. 

67	 See, e.g., Big Investors Accept More Rating Agencies, Asset-Backed Alert, May 19, 2017.
68	 See S&P Vaults Past Moody’s in Conduit Sector, Commercial Mortgage Alert, Jan. 24, 2020; S&P, Moody’s Duke It Out in 

Fitch’s Shadow, Commercial Mortgage Alert, Jan. 25, 2019.
69	 See, e.g., Rating Firms Seek Changes to Index, Asset-Backed Alert, May 26, 2017; see also Investment Company Institute, 

2022 Investment Company Fact Book (2022), at 29, available at https://www.icifactbook.org/ (index funds made up 21% 
of assets in long-term funds at the end of 2011 and 43% at the end of 2021).

70	 See Fitch Ratings Joins J.P. Morgan High Yield Bond Indices, Fitch Ratings, June 28, 2017. In a related example, 
DBRS announced that its ratings would be included in the determination of index credit quality classifications for 
CAD-denominated securities in the Bloomberg Barclays Canada Aggregate Index and the Global Aggregate Index, 
resulting in approximately 49 securities being added to the Canadian Aggregate Index. See DBRS Bond Ratings to Be 
Included in the Bloomberg Barclays Canada Aggregate Index, DBRS, Inc., Apr. 19, 2018.

71	 See, e.g., Section IV.C of the March 2012 Annual Report, available at https://www.sec.gov/divisions/marketreg/
ratingagency/nrsroannrep0312.pdf. As discussed in the March 2012 Report, economic barriers to entry include issuers and 
market participants favoring well-established NRSROs due to their reputation, and economies of scale which may allow 
larger NRSROs to offer advantageous services or pricing. Academic literature continues to identify these as barriers to 
entry. See, e.g., Sangiorgi, F. and Spatt, C., The Economics of Credit Rating Agencies, Foundations and Trends in Finance, 
12, 1-116 (2017), available at https://ssrn.com/abstract=3055889.

of NRSROs,67 investment guidelines continue to 
be identified as a factor impacting the selection of 
NRSROs to rate certain transactions.68 

A related barrier to entry is the inclusion require-
ments of some fixed income indices. To be 
included in certain of these indices, securities must 
be rated by specified NRSROs. Certain investment 
companies try to closely track the performance of 
the indices by purchasing the securities included in 
them (“index funds”). Index funds have grown as 
a share of the fund market, and they can increase 
the demand for securities bearing the ratings 
of particular NRSROs.69 For instance, Fitch 
announced that its ratings had been added to the 
J.P. Morgan High-Yield Bond Indices, noting that 
investors rely on such indices to determine which 
bonds suit their level of credit risk.70 

Market participants and academics have identified 
various other barriers to entry in the credit rating 
industry, including economic and regulatory 
barriers.71 For instance, when the Commission 

https://democrats-financialservices.house.gov/UploadedFiles/HHRG-117-BA16-Wstate-NadlerJ-20210721.pdf
https://democrats-financialservices.house.gov/UploadedFiles/HHRG-117-BA16-Wstate-NadlerJ-20210721.pdf
https://www.sec.gov/comments/s7-18-11/s71811-88.pdf
https://www.sec.gov/comments/s7-18-11/s71811-88.pdf
https://www.icifactbook.org/
https://www.sec.gov/divisions/marketreg/ratingagency/nrsroannrep0312.pdf
https://www.sec.gov/divisions/marketreg/ratingagency/nrsroannrep0312.pdf
https://ssrn.com/abstract=3055889


36  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

proposed new rules and rule amendments in 
accordance with the Dodd-Frank Act (the 
NRSRO Amendments), commenters expressed 
concerns that certain of the proposed require-
ments would be burdensome for small NRSROs 
to implement and could raise barriers to entry 
for credit rating agencies to seek to register as 
NRSROs.72 In connection with the adoption of the 
NRSRO Amendments, the Commission acknowl-
edged that, despite efforts to limit the impact on 
small entities, the Dodd-Frank Act contained 
requirements, including those implemented by 
the NRSRO Amendments, which impose costs on 
NRSROs and may consequently create barriers to 
entry and have negative impacts on competition.73 

At the same time, the Commission recognized 
substantial benefits associated with the NRSRO 
Amendments implementing Title IX, Subtitle 
C of the Dodd-Frank Act, which was designed 
to address the causes of certain market failures 
that may impair the integrity and transparency 
of NRSRO credit ratings.74  For instance, certain 
provisions of the NRSRO Amendments were 
designed primarily to enhance the integrity 
of how NRSROs determine credit ratings by 

72	 See 2014 Adopting Release, 79 FR 55078 (Sept. 15, 2014) at 55090, 55154, 55161, and 55254-55, available at https://
www.govinfo.gov/content/pkg/FR-2014-09-15/pdf/2014-20890.pdf, see also comment letters received with respect to the 
NRSRO Amendments as proposed, available at https://www.sec.gov/comments/s7-18-11/s71811.shtml.

73	 See 2014 Adopting Release, 79 FR at 55254.
74	 See id. at 55091; see also Section 931 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 

111-203, 124 Stat. 1376, H.R. 4173 (July 21, 2010) (articulating the findings of Congress, including that the activities and 
performance of credit rating agencies are matters of national public interest and that certain market failures necessitate 
increased accountability on the part of credit rating agencies).

75	 See 2014 Adopting Release, 79 FR at 55091.
76	 See id.
77	 See Section IV.C of the December 2015 Annual Report, available at https://www.sec.gov/ocr/reportspubs/annual-

reports/2015-annual-report-on-nrsros.pdf.
78	 For example, KBRA was granted a temporary conditional exemption from Rule 17g-5(c)(1), which prohibits an NRSRO 

from issuing or maintaining a credit rating solicited by a person that, in the most recently ended fiscal year, provided the 
NRSRO with net revenue equaling or exceeding 10% of the total net revenue of the NRSRO for the fiscal year. In another 
example, the Commission granted JCR a temporary conditional exemption from certain requirements of Section 15E(t), 
which include provisions regarding the composition and duties of the supervisory board of an NRSRO. The Commission’s 
orders granting exemption requests can be found under “Exemption Orders” in the “Commission Orders” section of the 
OCR webpage, available at https://www.sec.gov/ocr/ocr-commission-orders.html.

improving internal governance of NRSROs, 
managing potential principal-agent problems and 
conflicts of interest in the credit rating process, 
and promoting adherence to the procedures and 
methodologies for determining credit ratings.75 
Other provisions of the NRSRO Amendments 
were designed mainly to enhance the transparency 
of NRSRO credit ratings by increasing disclosure 
and reducing information asymmetries that may 
adversely affect users of credit ratings.76 

The NRSRO Amendments as adopted by the 
Commission include various changes from the 
proposed amendments intended to address 
concerns regarding barriers to entry, including 
standards allowing NRSROs to tailor particular 
requirements to their business models, size, and 
rating methodologies.77 

Additionally, there are provisions for exemptions 
built into several rules and statutory provisions, 
if the Commission deems that these require-
ments may impose an unreasonable burden on 
the NRSRO. NRSROs may also request exemp-
tions under Section 36 to rules or Exchange Act 
provisions.78

https://www.govinfo.gov/content/pkg/FR-2014-09-15/pdf/2014-20890.pdf
https://www.govinfo.gov/content/pkg/FR-2014-09-15/pdf/2014-20890.pdf
https://www.sec.gov/comments/s7-18-11/s71811.shtml
https://www.sec.gov/ocr/reportspubs/annual-reports/2015-annual-report-on-nrsros.pdf
https://www.sec.gov/ocr/reportspubs/annual-reports/2015-annual-report-on-nrsros.pdf
https://www.sec.gov/ocr/ocr-commission-orders.htmlS TA F F  R E P O R T   |   37

B.	 TRANSPARENCY

Congress described the Rating Agency Act as an 
act to improve ratings quality for the protection of 
investors and in the public interest “by fostering 
accountability, transparency, and competition in 
the credit rating agency industry.”79 Section 932 
of the Dodd-Frank Act is entitled “Enhanced 
regulation, accountability, and transparency of 
NRSROs.” Both acts contain various provisions 
designed to increase the transparency—through 
clear disclosure open to public scrutiny—of, among 
other things, NRSROs’ credit rating procedures 
and methodologies, business practices, and credit 
ratings performance. 

Under Exchange Act rules, NRSROs are required 
to disclose:

	■ Standardized performance statistics;80

	■ Consolidated information about credit rating 
histories;81

	■ Information about material changes and 
significant errors in the procedures and 
methodologies used to determine credit 
ratings;82

	■ Information about specific rating actions;83 and 
	■ Clear definitions of each symbol, number, or 

score in the rating scale used by the NRSRO.84

NRSROs must also disclose certain information in 
connection with each rating action.85 Such infor-

79	 See the preamble to the Rating Agency Act. 
80	 See Instructions for Exhibit 1 to Form NRSRO. 
81	 See Rule 17g-7(b). 
82	 See Rule 17g-8(a)(4). 
83	 See Rule 17g-7(a). 
84	 See Rule 17g-8(b)(2).
85	 See Rule 17g-7(a). 
86	 See Rule 17g-7(a)(1)(ii). 
87	 The reports accompanying a rating action are frequently available on a paid subscription basis, although some NRSROs 

provide access to such reports for free.
88	 Further transparency may be realized if NRSROs seek public comment for proposed new or changed methodologies. Rule 

17g-8(d)(1)(ii) provides that NRSROs must consider implementing controls reasonably designed to ensure that new or 
updated methodologies are disclosed to the public for consultation prior to their being employed.

mation includes, among other things, the version of 
the procedure or methodology used to determine 
the credit rating, a description of the types of data 
that were relied upon for purposes of determining 
the credit rating, an assessment of the quality of 
information available and considered in deter-
mining the credit rating, and information on the 
sensitivity of the credit ratings to assumptions made 
by the NRSRO.86

In addition to or in connection with required 
disclosures, NRSROs often issue press releases 
and reports at the time of a rating action to 
describe the rationale behind such rating action, 
and make versions of methodologies for deter-
mining credit ratings available on their websites.87 
The availability of underlying methodologies, 
together with a report discussing the analysis 
supporting the rating action, may provide 
additional transparency into an NRSRO’s credit 
analysis and credit rating process.

From time-to-time, NRSROs also publish revisions 
and updates to their methodologies. They may 
also at times publish revisions to the assumptions 
that are inputs to their methodologies and rating 
approaches, including changes to their economic 
outlooks or default rate assumptions. Revised 
methodologies and related assumptions may 
provide additional transparency into changes in the 
NRSROs’ credit views and analyses.88



38  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

NRSROs may also provide transparency to the 
extent they publish commentaries or research. 
NRSROs publish commentaries and research 
that generally include data, analyses, or projec-
tions on market sectors and economic outlooks.89 
These publications may be helpful to investors 
to understand industry trends and the NRSROs’ 
credit views.

For example, following Russia’s invasion of 
Ukraine, NRSROs began publishing commentaries 
and research that provide their perspectives on the 
potential credit and rating impacts of the conflict 
on issuers and debt obligations in different market 
sectors. They also began publishing Russia-Ukraine 
conflict-related commentaries on economic and 
market trends. KBRA published a report that said 
an estimated 3.7 million Ukrainian refugees from 
the Russia-Ukraine conflict are likely to settle more 
permanently in host countries and that Poland’s 
spending on refugees has amounted to about 1% 
of its GDP through June 2022.90 A DBRS report 
expressed the view that despite the negative impact 
on many existing transactions secured by affected 
aircraft, it believes the nationalization of aircraft 
by Russia will not have a material impact on the 
issuance of future transactions because of the rarity 
of such events.91

NRSROs have also continued to produce 
research in recent years regarding their views 
on ESG matters and how they incorporate ESG 

89	 NRSROs may also make market and economic data separately available.
90	 See KBRA, Ukraine Refugee Crisis and Host Nation Fiscal Impacts (Aug 23, 2022), available at https://www.kbra.com/

documents/report/70214/esg-ukraine-refugee-crisis-and-host-nation-fiscal-impacts.
91	 See DBRS, Secured Aviation Transactions: Jurisdictional Analysis, Political Risks, and Russian Aircraft Nationalization 

Implications (Aug 18, 2022), available at https://www.dbrsmorningstar.com/research/401563/secured-aviation-
transactions-jurisdictional-analysis-political-risks-and-russian-aircraft-nationalization-implications.

92	 See A.M. Best, Secondary Perils Increasingly Responsible for Largest US Catastrophes (Jan 14, 2022), 
available at https://www3.ambest.com/ambv/sales/bwpurchase.aspx?altsrc=108&record_code=316561&_
ga=2.34478628.405875056.1663286055-1130994754.1614722857.

93	 See KBRA, EVs’ Popularity Could Diminish State Gasoline Taxes for Transportation Funds (Jul 18, 2022), available at 
https://www.kbra.com/documents/report/68864/ev-s-popularity-could-diminish-state-gasoline-taxes-for-transportation-
funds.

considerations in their credit rating actions. For 
example, AMB published research presenting 
its view that secondary perils, such as wildfires, 
tornados, and severe thunderstorms, are 
accounting for a larger share of losses from 
catastrophe events than primary perils, such as 
hurricanes and floods, and that the heightened 
number of significant storms and weather events 
is an indication that climate change is having a 
more drastic and far-reaching effect on global 
weather events.92 KBRA wrote in its research that 
demand for electric vehicles will reduce gasoline 
taxes and related revenues and could pressure 
municipal bond issues that rely on them.93

A number of the Staff’s findings and recommenda-
tions in connection with the 2022 Section 15E 
examinations related to transparency issues. These 
findings included disclosure and reporting issues 
implicating Rule 17g-3, Rule 17g-7(a), and Form 
NRSRO. A description of these findings can be 
found in Section III.D.3 of this report.

C.	 CONFLICTS OF INTEREST

NRSROs operate under one or more business 
models, each having conflicts of interest. The 
primary business model of the NRSROs is the 
“issuer-pay” model, which is subject to a conflict 
in that the credit rating agency may be influenced 
to determine more favorable (i.e., higher) ratings 
than warranted in order to retain the obligors or 
issuers as clients. Another business model is the 

https://www.kbra.com/documents/report/70214/esg-ukraine-refugee-crisis-and-host-nation-fiscal-impacts
https://www.kbra.com/documents/report/70214/esg-ukraine-refugee-crisis-and-host-nation-fiscal-impacts
https://www.dbrsmorningstar.com/research/401563/secured-aviation-transactions-jurisdictional-analysis-political-risks-and-russian-aircraft-nationalization-implications
https://www.dbrsmorningstar.com/research/401563/secured-aviation-transactions-jurisdictional-analysis-political-risks-and-russian-aircraft-nationalization-implications
https://www3.ambest.com/ambv/sales/bwpurchase.aspx?altsrc=108&record_code=316561&_ga=2.34478628.405875056.1663286055-1130994754.1614722857
https://www3.ambest.com/ambv/sales/bwpurchase.aspx?altsrc=108&record_code=316561&_ga=2.34478628.405875056.1663286055-1130994754.1614722857
https://www.kbra.com/documents/report/68864/ev-s-popularity-could-diminish-state-gasoline-taxes-for-transportation-funds
https://www.kbra.com/documents/report/68864/ev-s-popularity-could-diminish-state-gasoline-taxes-for-transportation-funds


	 S TA F F  R E P O R T   |   39

“subscriber-pay” model, under which investors pay 
a subscription fee to access an NRSRO’s ratings. 
This model is also subject to conflicts of interests. 
For example, an NRSRO may be aware that an 
influential subscriber holds a securities position 
(long or short) that could be advantaged if a credit 
rating upgrade or downgrade causes the market 
value of the security to increase or decrease or that 
a subscriber investing in newly issued bonds and 
may obtain higher yields if the bonds were to have 
lower ratings.

In addition to being paid by issuers and 
subscribers, some NRSROs are paid to determine 
ratings by investors. Frequently these engagements 
contemplate the issuance of the credit rating on a 
private basis. In these cases, the NRSRO provides 
the credit rating directly to its client but does not 
publish (or make available to all its subscribers) 
the credit rating or a report detailing its credit 
analysis (although such a report may be provided 
to the client with the rating). This business 
model is subject to conflicts of interest, which 
are dependent on the objectives of the client for 
obtaining the rating.

Section 15E and the related Commission rules 
address conflicts of interest.94 For example, Rule 
17g-5 identifies certain conflicts of interest that 
are prohibited under all circumstances95 and other 
conflicts of interest that are prohibited unless an 
NRSRO has publicly disclosed the existence of the 
conflict and has implemented policies and proce-
dures reasonably designed to address and manage 
such conflict.96

94	 See, e.g., Section 15E(h) and Rule 17g-5. 
95	 See Rule 17g-5(c).
96	 See Rule 17g-5(a)(1)-(2) and Rule 17g-5(b); Instructions for Exhibits 6 and 7 to Form NRSRO. In addition, Section 15E(t)

(3)(B) requires an NRSRO’s board of directors to oversee the establishment, maintenance, and enforcement of policies and 
procedures to address, manage, and disclose any conflicts of interest.

97	 See Rule 17g-5(c)(2) and Rule 17g-5(c)(4).
98	 See Rule 17g-5(c)(8).
99	 Available at https://www.sec.gov/litigation/admin/2022/34-95127.pdf. 

Among the conflicts of interest identified in Rule 
17g-5 are conflicts involving individual credit 
analysts or other employees of an NRSRO. For 
example, an NRSRO is prohibited from issuing or 
maintaining a credit rating where an employee of 
the NRSRO that participated in determining, or is 
responsible for approving, the credit rating directly 
owns securities of, or is an officer or director of, the 
person that would be subject to the credit rating.97

Rule 17g-5(c)(8) is another example of a prohibited 
conflict of interest involving persons within an 
NRSRO. Under the Rule, an NRSRO is prohibited 
from issuing or maintaining a credit rating where 
a person within the NRSRO who participates in 
determining or monitoring the rating, or developing 
or approving procedures or methodologies used 
for determining the rating, also (i) participates in 
sales or marketing activities of the NRSRO or its 
affiliate, or (ii) is influenced by sales or marketing 
considerations.98 In June 2022, the Commission 
instituted settled administrative and cease-and-
desist proceedings against EJR and its founder 
and chief executive officer, Sean Egan, for, among 
other things, issuing or maintaining credit ratings 
where EJR employees, including Mr. Egan, who 
participated in determining the credit ratings also 
participated in the sales and marketing of a product 
or service of EJR and were also influenced by sales 
or marketing considerations in violation of Rule 
17g-5(c)(8).99 In addition, in November 2022, 
the Commission instituted settled administrative 
and cease-and-desist proceedings against S&P 
for issuing and maintaining credit ratings where 
commercial employees, who participated in sales 

https://www.sec.gov/litigation/admin/2022/34-95127.pdf


40  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

and marketing activity and were influenced by sales 
and marketing considerations, also participated in 
the determination of credit ratings in violation of 
Rule 17g-5(c)(8) by engaging in numerous commu-
nications with analytical staff.100

Other statutory provisions and Commission rules 
address conflicts of interest that may arise when 
a credit analyst seeks employment outside the 
NRSRO. Section 15E requires each NRSRO to 
have policies and procedures in place to provide 
for an internal “look-back” review process in 
order to determine whether any conflict of interest 
of a former employee influenced a credit rating 
in certain instances.101 Rule 17g-8(c) requires 
an NRSRO’s policies and procedures to address 
instances in which a “look-back” review deter-

100	 See In re S&P Global Ratings, Exch. Act Rel. No. 96308 (Nov. 14, 2022), available at https://www.sec.gov/litigation/
admin/2022/34-96308.pdf.

101	 See Section 15E(h)(4)(A).
102	 See Rule 17g-8(c). 

mined that a conflict of interest influenced a credit 
rating. Such policies and procedures are required to 
be reasonably designed to ensure that the NRSRO 
will promptly determine whether a credit rating 
must be revised and promptly publish a revised 
credit rating or an affirmation of the credit rating, 
along with certain disclosures about the existence 
of the conflict.102

Several of the Staff’s findings and recommenda-
tions in connection with the 2022 Section 15E 
examinations related to conflict of interest issues. 
Among other things, these findings addressed 
apparent issues with policies and procedures 
to address and manage conflicts of interest. A 
description of these findings can be found in 
Section III.D.3 of this report.

https://www.sec.gov/litigation/admin/2022/34-96308.pdf
https://www.sec.gov/litigation/admin/2022/34-96308.pdf


	 S TA F F  R E P O R T   |   41

V.	 ACTIVITIES RELATING TO NRSROs 

103	 Available at https://www.sec.gov/litigation/admin/2022/34-96308.pdf.
104	 Available at https://www.sec.gov/rules/other/2022/34-95243.pdf.
105	 Available at https://www.sec.gov/litigation/admin/2022/34-95127.pdf. 

A.	 �COMMISSION ORDERS AND 
RELEASES

T
he Commission issued the following  
orders and releases relating to NRSROs  
or credit ratings in general in calendar  
year 2022:

	■ In re S&P Global Ratings, Exch. Act Rel. No. 
96308 (Nov. 14, 2022).103 The Commission 
instituted settled administrative and cease-and-
desist proceedings against S&P concerning 
violations of Section 15E(h)(1) and Rules 
17g-5(c)(8)(i) and (ii). The violations were in 
connection with S&P commercial employees 
communicating with analytical staff and thereby 
becoming participants in the rating process for 
purposes of Rule 17g-5(c)(8). The SEC’s order 
also finds that S&P failed to establish, maintain, 
and enforce written policies and procedures 
designed to ensure compliance with Rules 
17g-5(c)(8)(i) and (ii).

	■ Order Granting Registration of Demotech, 
Inc. as a Nationally Recognized Statistical 
Rating Organization, SEC Rel. No. 34-95243 
(July 11, 2022).104 The Commission granted 
the registration of Demotech, Inc. with the 
Commission as a nationally recognized 

statistical rating organization under Section 
15E for the insurance companies class of 
credit ratings.

	■ In re Egan-Jones Ratings Company and Sean 
Egan, Exch. Act Rel. No. 95127 (June 21, 
2022).105 The Commission instituted settled 
administrative and cease-and-desist proceedings 
against EJR and Sean Egan concerning EJR’s 
violations of Sections 15E(h)(1) and 15E(f)(2) 
and Rules 17g-5(c)(8)(i) and (ii) and 17g-5(c)
(1) and Egan’s causing the Rule 17g-5(c)(8)
(i) and (ii) violations. The violations were in 
connection with failures to separate sales and 
marketing activities and considerations from 
the determination of credit ratings, the issuance 
and maintenance of credit ratings solicited by 
a person that, in the most recently ended fiscal 
year, provided the NRSRO with net revenue 
equaling or exceeding ten percent of the total 
net revenue of the NRSRO for the fiscal year, 
and the issuance and maintenance of ratings in 
certain classes of securities without prominently 
disclosing that such ratings were not issued or 
maintained by an NRSRO that was registered to 
issue ratings in such classes.

	■ Removal of References to Credit Ratings From 
Regulation M, Release No. 34-94499 (Mar. 23, 

https://www.sec.gov/litigation/admin/2022/34-96308.pdf
https://www.sec.gov/rules/other/2022/34-95243.pdf
https://www.sec.gov/litigation/admin/2022/34-95127.pdf


42  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

2022), 87 FR 18312 (Mar. 30, 2022).106 The 
Commission re-proposed amendments to 
remove the references to credit ratings included 
in Rules 101 and 102 of Regulation M.

B.	 COURT JUDGMENT

The following judgment relating to litigation 
brought against a former NRSRO by the 
Commission was entered in calendar year 2022:

	■ Securities and Exchange Commission v. 
Morningstar Credit Ratings, No. 1:21-cv-1359 
(S.D.N.Y. June 7, 2022).107 The U.S. District 
Court for the Southern District of New York 
entered a final judgment against MCR. The 
Commission’s complaint alleged that MCR 
violated certain disclosure and internal control 
provisions of Section 15E and certain related 
rules. MCR consented to the entry of the 
final judgment, which ordered it to pay a civil 
money penalty.

106	 Available at https://www.federalregister.gov/documents/2022/03/30/2022-06583/removal-of-references-to-credit-ratings-
from-regulation-m.

107	 Available at https://www.sec.gov/litigation/litreleases/2022/judgment25409.pdf. 
108	 Available at https://www.sec.gov/files/2022-ocr-staff-report.pdf. 

C.	 STAFF PUBLICATION

The Staff issued the following publication relating 
to NRSROs or credit ratings in general in calendar 
year 2022:

	■ Staff Report on Nationally Recognized 
Statistical Rating Organizations, dated January 
2022 (the 2021 Staff Report), as required 
by Section 6 of the Rating Agency Act and 
Section 15E(p)(3)(C).108 The 2021 Staff Report 
addresses the matters described in the second 
paragraph under Section II of this Report for 
the period June 26, 2020 through December 31, 
2021, and summarizes the essential findings of 
the examinations conducted by the Staff under 
Section 15E(p)(3)(C) for the review period 
January 1, 2020 to December 31, 2020.

https://www.federalregister.gov/documents/2022/03/30/2022-06583/removal-of-references-to-credit-ratings-from-regulation-m
https://www.federalregister.gov/documents/2022/03/30/2022-06583/removal-of-references-to-credit-ratings-from-regulation-m
https://www.sec.gov/litigation/litreleases/2022/judgment25409.pdf
https://www.sec.gov/files/2022-ocr-staff-report.pdf


	 S TA F F  R E P O R T   |   43

VI.	APPENDIX: SUMMARY OF 
STATUTORY FRAMEWORK  

AND RULES

109	 Pub. L. No. 109-291, 120 Stat. 1327 (2006).
110	 Pub. L. No. 111-203, § 932, 124 Stat. 1376, 1872-83 (2010).
111	 See Section 15E(p)(2) for a description of OCR staffing requirements.
112	 Section 15E(b)(2) and Rule 17g-1(f).
113	 Section 15E(b)(1) and Rule 17g-1(e).
114	 Section 15E(a)(3) and Rule 17g-1(i).
115	 Section 15E(a)(1)(B)(i) and Section 15E(a)(1)(B)(ii).
116	 Section 15E(c)(3)(A). 
117	 Rule 17g-2(b)(12).
118	 See, e.g., Rule 17g-8(d)(1)–(4). 

S
ection 15E and Rules 17g-1 through 17g-10 
govern the registration and oversight program 
for credit rating agencies that are registered 
with the Commission as NRSROs. This 

regulatory regime was established by the Rating 
Agency Act109 and amended by the Dodd-Frank 
Wall Street Reform and Consumer Protection Act 
(Dodd-Frank Act).110

The Dodd-Frank Act mandated the creation of 
the Office of Credit Ratings (OCR), which is 
responsible for oversight of credit rating agencies 
registered with the Commission as NRSROs. 
OCR’s Staff includes professionals with expertise 
in a variety of areas that relate to its regulatory 
mission, such as corporate, municipal, and struc-
tured debt finance.111 

Pursuant to the Commission’s regulatory regime for 
NRSROs, an NRSRO is required to, among other 
things:

	■ File with the Commission an annual certification 
of its Form NRSRO registration,112 promptly 
update its filing in certain circumstances,113 and 
make its current Form NRSRO filing and most 
of its current Form NRSRO Exhibits available 
on its public website.114 

	■ Disclose certain information, including 
information concerning the NRSRO’s 
performance measurement statistics and its 
procedures and methodologies to determine 
ratings.115

	■ Establish, maintain, enforce, and document an 
effective internal control structure governing the 
implementation of and adherence to policies, 
procedures, and methodologies for determining 
credit ratings,116 and retain records of its internal 
control structure.117

	■ Consider certain factors with respect to its 
establishment, maintenance, enforcement, and 
documentation of an effective internal control 
structure.118



44  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

	■ Establish, maintain, enforce, and document 
policies and procedures reasonably designed 
to achieve certain objectives concerning its 
development and application of, and disclosures 
related to, methodologies and models.119 

	■ File an unaudited report containing an 
assessment by management of the effectiveness 
during the fiscal year of the NRSRO’s internal 
control structure governing the implementation 
of and adherence to policies, procedures, 
and methodologies for determining credit 
ratings.120 The report must be accompanied 
by a signed statement by the NRSRO’s chief 
executive officer or an individual performing 
similar functions.121

	■ Establish, maintain, enforce, and document 
policies and procedures that are reasonably 
designed to: assess the probability that an issuer 
of a security or money market instrument will 
default or fail to make required payments to 
investors,122 and ensure that it applies any rating 
symbol, number, or score in a manner that is 
consistent for all types of obligors, securities, 
and money market instruments for which the 
symbol, number, or score is used.123 

	■ Publish an information disclosure form when 
taking a rating action with respect to a rating 
assigned to an obligor, security, or money-
market instrument in a class for which it is 
registered as an NRSRO.124 The information 
form must disclose certain information with 
respect to the particular rating action.125 
In addition, the NRSRO must attach to 
the information disclosure form a signed 

119	 See, e.g., Rule 17g-8(a)(2)–(5). 
120	 Rule 17g-3(a)(7)(i).
121	 Rule 17g-3(b)(2).
122	 Rule 17g-8(b)(1).
123	 Rule 17g-8(b)(3).
124	 Rule 17g-7(a).
125	 Rule 17g-7(a)(1)(ii)(A)-(N) specifies the information 

that must be disclosed in the information disclosure 
form.



	 S TA F F  R E P O R T   |   45

statement by a person within the NRSRO with 
responsibility for the rating action.126

	■ Make and retain, or retain, certain records, 
including a record documenting its established 
procedures and methodologies used to 
determine credit ratings127 and records related 
to its ratings.128 An NRSRO must promptly 
furnish to the Commission or its representatives 
copies of required records, including English 
translations of those records, upon request.129

	■ Establish, maintain, and enforce written 
policies and procedures reasonably 
designed to prevent the misuse of material 
non-public information (MNPI), including 
the inappropriate dissemination of MNPI 
both within and outside the NRSRO, the 
inappropriate trading of securities using MNPI 
by a person within the NRSRO, and the 
inappropriate dissemination of pending credit 
rating actions within and outside the NRSRO 
before issuing the rating on the Internet or 
through another readily accessible means.130

	■ Establish, maintain, and enforce written 
policies and procedures reasonably designed 
to address and manage conflicts of interest.131 
Certain conflicts of interest are expressly 
prohibited,132 and for other types of conflicts of 

126	 Rule 17g-7(a)(1)(iii).
127	 Rule 17g-2(a)(6).
128	 The records that an NRSRO must make and retain, or retain, with respect to its ratings include the identity of certain 

persons who participated in determining or approving the rating, records used to form the basis of a rating, external and 
internal communications received or sent by the NRSRO and its employees related to a rating, and for ABS ratings, a 
record of the rationale for any material difference between the final rating assigned and the rating implied by a quantitative 
model that was a substantial component in determining the rating. Rule 17g-2(a)(2)(i), (ii), and (iii); Rule 17g-2(b)(2) and 
(b)(7).

129	 Section 15E(a) and (b) and Rule 17g-2(f).
130	 Section 15E(g) and Rule 17g-4.
131	 Section 15E(h) and Rule 17g-5. See also Section IV.C of this Report.
132	 Rule 17g-5(c). See also Section IV.C of this Report.
133	 Rule 17g-5(a)(1) and (a)(2); Rule 17g-5(b).
134	 Rule 17g-6.
135	 Section 15E(a)(1)(B)(v).
136	 Section 15E(j)(3).
137	 Section 15E(j)(1) and (3).
138	 Section 15E(j)(5).

interest, the NRSRO must disclose the conflicts 
and have policies and procedures in place to 
manage them.133

	■ Refrain from engaging in specified unfair, 
coercive, or abusive practices.134

	■ Provide information on whether it has in effect a 
code of ethics, and if not, the reasons it does not 
have a code of ethics.135 

	■ Establish procedures for the receipt, retention, 
and treatment of complaints regarding credit 
ratings, models, methodologies, and compliance 
with the securities laws and its policies and 
procedures developed under this regulatory 
regime, and of confidential, anonymous 
complaints.136 

	■ Designate a compliance officer (the DCO) 
responsible for administering policies and 
procedures related to MNPI and conflicts 
of interest, ensuring compliance with the 
securities laws and regulations, and establishing 
procedures for handling complaints by 
employees or users of credit ratings.137 The DCO 
must submit an annual report to the NRSRO 
on the compliance of the NRSRO with the 
securities laws and the NRSRO’s policies and 
procedures, and the NRSRO must file the report 
with the Commission.138



46  |   O F F I C E  O F  C R E D I T  R AT I N G S 	

	■ Have a board of directors or similar governing 
body (collectively, the Board), certain of 
whose members must be independent from 
the NRSRO.139 An NRSRO’s Board, or 
members thereof, are responsible for exercising 
oversight of specified subjects related to the 
NRSRO’s rating business and for approving 
the procedures and methodologies, including 
qualitative and quantitative data and models 
that the NRSRO uses to determine ratings.140

139	 Section 15E(t)(2).
140	 Section 15E(t)(3) and Rule 17g-8(a)(1).
141	 Rule 17g-9.
142	 Section 15E(h)(4) and (5); Rule 17g-8(c).

	■ Establish, maintain, enforce, and document 
standards of training, experience, and 
competence for the individuals it employs to 
participate in the determination of credit ratings 
that are reasonably designed to achieve the 
objective that the NRSRO produces accurate 
credit ratings, and retain a record of these 
standards.141 

	■ Establish policies and procedures regarding 
post-employment activities of certain former 
personnel.142





WASHINGTON, DC