The Securities and Exchange Commission is proposing new rules under the Dodd-Frank Act to increase disclosure and reporting requirements for credit ratings agencies—including mandating that the compliance officer at each rating agency file a separate annual report addressing how well the firm complied with securities laws.

According to the proposed rulemaking, which was voted in unanimously by the Commission at the agency's open meeting today, nationally recognized statistical rating organizations would have to report on internal controls, protect against conflicts of interest, establish professional standards for credit analysts, publish the ratings, disclose the methodology used to derive the rating, as well as disclose third-party due diligence reports for asset-backed securities. The proposed rules also implicate third-party due diligence providers, in addition to asset-backed securities issuers and underwriters.

The SEC will accept comments on the 518-page proposed rule for 60 days following its publication in the Federal Register.

These proposals represent the SEC's most recent effort “to enhance the credit rating industry in light of the financial crisis,” said Chairman Mary Schapiro in a statement at the meeting today. The agency has already proposed to remove references to the NRSRO's, as mandated under Dodd-Frank.