Placing some of the blame for the 2007-2009 financial crisis on nationally recognized statistical rating organizations—notably due to the questionable accuracy of credit ratings involving subprime residential mortgage-backed securities—the Dodd-Frank Act recommended that the Government Accountability Office conduct a study to determine the feasibility of creating an organization that sets standards for ratings analysts. That report, released on July 30, warns that creating such an overseer, at this time, is “premature” and would face numerous challenges.

The organization envisioned by the Dodd-Frank Act would be responsible for developing standards to govern the profession (including codes of ethical conduct); overseeing member compliance with the standards; registering or providing certifications and examinations for members in the profession; and  engaging in public education, outreach, or advocacy about the profession.Interviewing representatives of NRSROs and stakeholders (including academics, investors, advocacy groups, and international regulators) concerns emerged that creating such an organization might duplicate existing standards, codes of conduct, or the services provided by other professional organizations. A common view  was that more time is needed to evaluate the effectiveness of SEC regulations that became effective in June. These rules require each NRSRO to establish training, experience, and competence standards to ensure analysts produce accurate ratings and to periodically test analysts' knowledge of the NRSRO's procedures and methodologies.

The GAO also detailed the obstacles an NRSO oversight organization would face, among them:

Delineating the mission of an organization would be difficult, at this time, because the effects of the new SEC regulations were unknown.

Obtaining sufficient funding through membership fees would be challenging because of the relatively small population of analysts (about 4,500 as of 2014)..

Creating an organizational structure that would provide equitable representation for all members, including from smaller NRSROs, could be challenging because of industry concentration (88 percent of analysts work for 3 of the 10 NRSROs).

Developing core activities and services, including professional standards, education and training curricula, certification tests, and structures to oversee member compliance could also be difficult because of differences in NRSRO methodologies, concerns about sharing confidential information, and analyst specialization in specific rating classes.

Among the GAO’s recommendations are that the SEC could expand its oversight of analysts by defining minimum experience or knowledge requirements for analysts or requiring all analysts to pass an examination before conducting ratings. Before SEC issued new rules in June, there were no regulatory requirements for training and testing of credit rating analysts in the United States.

Another idea the GAO presented for consideration is that a third party—such as an existing professional organization or a task force of regulatory and other experts—could be engaged to develop professional standards for credit rating analysts and oversee compliance. Some experts interviewed by the GAO noted that this approach might be more efficient than creating a new organization because it could leverage existing resources and mitigate concerns about larger NRSROs dominating an organization. The SEC considered public comments regarding this type of approach, but stopped short of adoption because it did not allow NRSROs sufficient flexibility to design standards tailored to their business model, size, and methodologies.

An NRSRO can be registered with the SEC in one or more of five classes of credit ratings: financial institutions, brokers, or dealers; insurance companies; corporate issuers; issuers of asset-backed securities; and issuers of government securities, municipal securities, or securities issued by a foreign government. As of April 2015, there were 10 registered NRSROs, among them Standard & Poor’s, Moody’s Investors Service and Fitch Ratings.