The U.S. Securities and Exchange Commission
has opened a new Office of Credit Ratings to oversee Nationally Recognized
Statistical Rating Organizations, commonly referred to as credit rating
agencies. Thomas J. Butler, a former executive with Morgan Stanley Smith Barney,
has been appointed the OCR’s first director.
Established by the Dodd-Frank Act, the
OCR will conduct annual examinations of credit rating agencies and follow up
with a public report. The new office will centralize oversight and annual
examinations of credit rating firms. Up until now, the SEC’s Division of
Trading and Markets has supervised rulemaking related to the firms, while its
Office of Compliance and Examinations was responsible for examining credit
Butler will oversee a staff of
approximately 25 lawyers, accountants, and examiners responsible for examining
and monitoring the credit rating agencies. Previously, he spent 14 years at
Morgan Stanley Smith Barney as a managing director and chief operating officer
for the Investment Strategy, Investment Advisory, Global Investments and Public
Sector Group units.
Read a PDF of the first public report regarding annual
examinations of credit rating agencies here.