SEC Orders Formal Review of Egan-Jones' Bid to Resume Key Credit Ratings
Event summary
- SEC issued an order on March 23, 2026, for a formal review of Egan-Jones' application to resume rating asset-backed and government securities.
- The SEC must decide by August 12, 2026, whether to deny re-registration for these two classes of securities.
- Egan-Jones applied for the additional NRSRO licenses on October 7, 2025, and supplemented its application on January 14, 2026.
- Egan-Jones claims its investor-pay model ensures independence, unlike issuer-pay models used by competitors.
The big picture
The SEC's review of Egan-Jones' application reflects ongoing efforts to increase competition in the credit rating market, a priority since the 2008 financial crisis. Legacy rating firms have faced criticism for their role in the crisis and recent high-profile failures, highlighting the need for independent and reliable ratings. Egan-Jones' investor-pay model positions it as a potential disruptor, but its ability to secure the necessary licenses will depend on regulatory approval and market acceptance.
What we're watching
- Regulatory Dynamics
- How the SEC's decision will impact market concentration in credit ratings, particularly for asset-backed and government securities.
- Competitive Landscape
- Whether Egan-Jones can sustain its growth and challenge the dominance of legacy rating firms like Moody's and S&P.
- Execution Risk
- The pace at which Egan-Jones can demonstrate compliance and qualifications to the SEC during the review process.
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