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Nationally Recognized Statistical Rating Organization

The Securities and Exchange Commission grants the designation of nationally recognized statistical rating organization (or NRSRO) to credit rating agencies that meet certain requirements.

Expanded Definition

The SEC stamp of approval is meant to protect investors by bolstering credibility, accountability, and transparency within the industry that rates stocks, bonds, and other securities. NRSROs must disclose their procedures and methodologies for assigning ratings and make public certain performance measurement statistics including historical downgrades and default rates.

NRSROs include Moody's, Fitch, and Standard & Poor's.

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