Nationally Recognized Statiscal Rating Organizations

Learn more at https://www.sec.gov/ocr/ocr-learn-nrsros and the SEC Office of Credit Ratings performs oversight on NRSRO's.'

The Authority

The authority which governs NRSRO include Section 15E of the Securities Exchange Act of 1934 (SEC) and Exchange Act Rule 17g-1.

Classes of NRSRO's

1. Financial Institution
2. Insurance Companies
3. Corporate Issuers
4. Asset-backed Securities
5. Government Securities

REDEECASH will target the Corporate Issuers initially with a future registration target for Asset-backed and Government Securities.

What a credit rating is NOT?

A credit rating does not reflect other types of risk, such as market or liquidity risks, which may also affect the value of a security. Nor does a credit rating consider the price at which the security is offered or sold. ** You should not interpret* a credit rating** ***** as investment advice and should not view it as a recommendation to buy, sell, or hold securities .

A credit rating is not a guarantee that a financial obligation will be repaid. For example, an ‘AAA’ credit rating on a debt instrument does not mean the investor will always be paid—instruments rated at this level sometimes default.

Potential Conflicts of Interest

Many credit rating agencies—including the largest agencies—are paid by the obligors they rate or by the issuers of the securities they rate. This creates a potential conflict of interest in that the credit rating agency may be influenced to determine more favorable ( i.e. , higher) ratings than warranted to retain the obligors or issuers as clients and to obtain new obligor or issuer clients.

Alternatively, some credit rating agencies are paid by subscribers to their ratings services, which are usually investors. Investors’ desire for low or high credit ratings, depending on their holdings and trading positions, may also present a conflict of interest.

NRSROs are required by law to disclose these potential conflicts of interest. NRSROs are also required to establish, maintain, and enforce written policies and procedures to address and manage these potential conflicts of interest.

Current NRSRO's

Below is a list of credit rating agencies currently registered as NRSROs, organized in alphabetical order. Documents related to each NRSRO are accessible by clicking on the name of the NRSRO.

1. A.M. Best Rating Services, Inc.
2. DBRS, Inc.
3. Demotech, Inc.
4. Egan-Jones Ratings Co.
5. Fitch Ratings, Inc.
6. HR Ratings de México, S.A. de C.V.
7. Japan Credit Rating Agency, Ltd.
8. Kroll Bond Rating Agency, Inc.
9. Moody's Investors Service, Inc.
10. S&P Global Ratings
11. REDEECASH (coming soon...)

Application to the SEC

Form NRSRO at https://www.sec.gov/files/formnrsro.pdf

Current Operations

At the time of application for NRSRO, the company must have been operating for at least three years as a credit reprot agency with the appropriate state and local licenses, if any.

Initial Application

An Applicant applying to be registered with the Commission as an NRSRO must file with the Commission an initial application on Form NRSRO. To complete an initial application:

• Check the “INITIAL APPLICATION” box at the top of Form NRSRO.
• Complete Items 1, 2, 3, 4, 5, 6, and 8. (See Instructions below for each Item). Enter “None” or “N/A” where appropriate.
• Unless exempt from the requirement, attach certifications from qualified institutional buyers, marked “Certification from Qualified Institutional Buyer” (See Instructions below for Item 6C).
• Attach Exhibits 1 through 13 (See Instructions below for each Exhibit).
• Execute the Form.

The Applicant must promptly file with the Commission a written notice if information submitted to the Commission in an initial application is found to be or becomes materially inaccurate prior to the date of a Commission order granting or denying the application. The notice must identify the information found to be materially inaccurate. The Applicant also must promptly file with the Commission an application supplement on Form NRSRO (See instructions below for an application supplement).

Qualified Institutional Buyer

Under Section 15E(a)(1)(C) of the Exchange Act, states that a minimum of 10 QIB's must provide certification and these QIB's have been using the credit rating system for at least three years. Hence, a new NRSRO must be in operation issuing credit ratings for at least three years before applying to be a NRSRO.

QIB's are permitted to trade Rule 144A exempt securities on the REDEECASH EXCHANGE.

QIB's are defined unde US Code Title 17 Chapter 2B Section 78(c)(64) Qualified institutional buyer.-The term "qualified institutional buyer" has the meaning given such term in section 230.144A(a) of title 17, Code of Federal Regulations, or any successor thereto.

The list of eligible Qualified Institutitional Buyers (QIB)

• Any of the following entities, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with the entity
  • Any insurance company as defined in section 2(a)(13) of the Act;
  • Any** investment company registered under the Investment Company Act or any **business development company as defined in section 2(a)(48) of that Act;
  • Any** Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958 or any **Rural Business Investment Company as defined in section 384A of the Consolidated Farm and Rural Development Act;
  • Any** **plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees;
  • Any** **employee benefit plan within the meaning of title I of the Employee Retirement Income Security Act of 1974;
  • Any trust fund whose trustee is a bank or trust company and whose participants are exclusively plans of the types identified in** paragraph (a)(1)(i) (D) or **(E) of this section, except trust funds that include as participants individual retirement accounts or H.R. 10 plans.
  • Any** **business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;
  • Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation (other than a bank as defined in section 3(a)(2) of the Act or a savings and loan association or other institution referenced in section 3(a)(5)(A) of the Act or a foreign bank or savings and loan association or equivalent institution), partnership, limited liability company, or Massachusetts or similar business trust;
  • Any** **investment adviser registered under the Investment Advisers Act; and
  • Any institutional accredited investor, as defined in rule 501(a) under the Act (17 CFR 230.501(a)), of a type not listed in paragraphs (a)(1)(i)(A) through (I) or paragraphs (a)(1)(ii) through (vi).
• Any** dealer registered pursuant to section 15 of the Exchange Act, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $10 million of securities of issuers that are not affiliated with the dealer, **Provided, That securities constituting the whole or a part of an unsold allotment to or subscription by a dealer as a participant in a public offering shall not be deemed to be owned by such dealer;
• Any** **dealer registered pursuant to section 15 of the Exchange Act acting in a riskless principal transaction on behalf of a qualified institutional buyer;
• Any investment company registered under the Investment Company Act, acting for its own account or for the accounts of other qualified institutional buyers, that is part of a family of investment companies which own in the aggregate at least $100 million in securities of issuers, other than issuers that are affiliated with the investment company or are part of such family of investment companies.** **Family of investment companies means any two or more investment companies registered under the Investment Company Act, except for a unit investment trust whose assets consist solely of shares of one or more registered investment companies, that have the same investment adviser (or, in the case of unit investment trusts, the same depositor), Provided That, for purposes of this section:
  • Each series of a series company (as defined in Rule 18f–2 under the Investment Company Act [17 CFR 270.18f–2]) shall be deemed to be a separate investment company; and
  • Investment companies shall be deemed to have the same adviser (or depositor) if their advisers (or depositors) are majority-owned subsidiaries of the same parent, or if one investment company's adviser (or depositor) is a majority-owned subsidiary of the other investment company's adviser (or depositor);
• Any entity, all of the equity owners of which are qualified institutional buyers, acting for its own account or the accounts of other qualified institutional buyers; and
• Any** **bank as defined in section 3(a)(2) of the Act, any savings and loan association or other institution as referenced in section 3(a)(5)(A) of the Act, or any foreign bank or savings and loan association or equivalent institution, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with it and that has an audited net worth of at least $25 million as demonstrated in its latest annual financial statements, as of a date not more than 16 months preceding the date of sale under the Rule in the case of a U.S. bank or savings and loan association, and not more than 18 months preceding such date of sale for a foreign bank or savings and loan association or equivalent institution.

Adding a Consumer Class to the NRSRO registration

Currently the consumer is ONLY protected by the Consumer Credit Act and Fair Debt Collections and Billing Act, with oversight by the Consumer Financial Protection Bureau ()CFPB) but this process is broken leading to widespread abuses. Without duplicating the current laws but expanding on them under the oversight of the SEC can real consumer protection can actually occur,

The instructions follow,

NRSRO applying to register for an additional class of credit ratings must file with the Commission an application on Form NRSRO. To complete an application to register for an additional class of credit ratings:

• Check the “APPLICATION TO ADD CLASS OF CREDIT RATINGS” box at the top of Form NRSRO.
• Complete Items 1, 2, 3, 4, 5, 6, 7, and 8 on the Form following all applicable instructions for each Item (See Instructions below for each Item). If any information in an Item on a previously submitted Form NRSRO is materially inaccurate, update that information. Enter “None” or “N/A” where appropriate. Complete each Item even if the Item is not being updated.
• Unless exempt from the requirement, attach certifications from qualified institutional buyers for the additional class of credit ratings marked “Certification from Qualified Institutional Buyer” (See Instructions below for Item 6C).
• If any information in an Exhibit previously submitted is materially inaccurate, update that information.
• Execute the Form.

The Applicant must promptly file with the Commission a written notice if information submitted to the Commission in an application to add a class of credit ratings is found to be or becomes materially inaccurate prior to the date of a Commission order granting or denying the application. The notice must identify the information found to be materially inaccurate. The Applicant also must promptly file with the Commission an applicatio