A panel of academics and former credit-ratings-firm executives urged the Securities and Exchange Commission on Monday to finally end the industry’s “issuer pay” business model in which entities that sell bonds also pay for ratings. Monday’s discussion didn’t include representatives from ratings firms, though an S&P Global SPGI -0.95% Inc. executive has previously defended the issuer-pay model. Panelists at Monday’s hearing presented ideas meant to limit issuers’ ability to hire and pay ratings firms for their grades. ratings fund” that would pay ratings firms. “You don’t want more competition because more competition causes easy ratings,” Mr. Kotecha said during the panel discussion.

Source: Wall Street Journal November 04, 2019 23:48 UTC