Removal of References to Credit Ratings From Regulation M

Document 2023-12591 is a Final Rule published by the Securities and Exchange Commission in the Federal Register on June 20, 2023, with an effective date of August 21, 2023. The Securities and Exchange Commission ("Commission") is adopting rule amendments to implement section 939A(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank Act"), which requires, among other things, that the Commission remove from its regulations any references to credit ratings and substitute in their place alternative standards of creditworthiness. The amendments remove certain existing rule exceptions that reference credit ratings for nonconvertible debt securities, nonconvertible preferred securities, and asset-backed securities and substitute in their place new exceptions that are based on alternative standards of creditworthiness. These substitutes include exceptions for nonconvertible debt securities and nonconvertible preferred securities (together, "Nonconvertible Securities") of issuers who meet a specified probability of default threshold, as well as exceptions for asset-backed securities that are offered pursuant to an effective shelf registration statement filed on a certain form that is tailored to asset-backed securities offerings. The Commission is also adopting an amendment to a recordkeeping rule applicable to broker-dealers in connection with their reliance on an exception involving probability of default determinations. View the original at https://www.federalregister.gov/documents/2023/06/20/2023-12591/removal-of-references-to-credit-ratings-from-regulation-m.

No. Document 2023-12591 is not classified as economically significant under Executive Order 12866. Economically significant rules require OIRA review and are estimated to have impacts of $100 million or more per year.