AFP Press Release

AFP Urges SEC to Fully Exercise Oversight Authority Over Credit Rating Agencie

Washington, DC – March 24, 2008 - In a letter to the Securities and Exchange Commission (SEC), the Association for Financial Professionals (AFP) strongly urged SEC Chairman Christopher Cox to fully exercise authority the SEC was granted in the Credit Rating Agency Reform Act of 2006 and press for the reform of credit rating agencies.

Jim Kaitz, President and CEO of AFP, wrote in a March 20 letter to Chairman Cox, “More than five years ago, AFP members expressed serious reservations about the credibility of the credit rating agencies. Credit ratings play a crucial role in our capital markets. The time has come for the SEC to address the unfair and abusive practices that undermine the credibility and legitimacy of the credit rating agencies.”

AFP has been a vocal proponent of credit rating reform since 2003. AFP has testified before Congress that the information provided by rating agencies is neither timely nor accurate, and that rating agencies primarily serve the interests of parties other than investors.

The membership of AFP includes 16,000 financial executives employed by over 5,000 corporations and other organizations. Members are responsible for issuing short- and long-term debt, and also invest corporate cash and retirement assets for their organizations.

The policy statement of the President’s Working Group on Financial Markets includes a series of recommendations for reform of the credit ratings process, with an emphasis on structured finance markets. AFP believes that many of these reforms, including changing practices related to transparency and conflict of interests, are not unique to the structured credit markets.

In 2006, Congress approved the Credit Rating Agency Reform Act. The law gave the SEC additional authority to oversee rating agencies. That authority allows the SEC to impose an element of accountability on rating agencies to produce credible and reliable ratings. The reform act also gave the SEC the authority to address conflicts of interest.

“Today, the value of credit ratings has been significantly diminished and the SEC has the authority to confront the situation head on and hold the credit ratings agencies accountable,” said Kaitz. “It is time for the SEC to act.”