Wednesday, July 28, 2010

Realpoint advocates point-in-time ratings

Realpoint, a subsidiary of Morningstar, has been in the media recently discussing the use of point-in-time ratings in response to Nationally Registered Statistical Rating Organizations (NRSROs) provisions in the recently passed Dodd-Frank Act. The bill makes NRSROs liable for the quality of their calls when they are used for public sale documents. One strategy that could reduce the firm's liability is the point-in-time ratings model, Realpoint's attorneys and investors said. The agency believes sticking to ratings that refer to a specific point in time, as opposed to grading a share class on how it may do in the future, may limit exposure to liability.

From the Realpoint website:

Realpoint is a nationally recognized credit-rating agency that has earned a reputation for innovation and excellence in the structured finance market. Our goal is to increase market transparency and provide investors with the highest quality ratings and analysis by offering a wide array of securities research, surveillance services, data, and technology solutions. More than 225 institutional investment firms trust Realpoint to help them identify credit risk in structured finance investments.

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