Rating firms' controversial business model looks set to escape wholesale changes as regulators struggle to agree on an alternative, the Wall Street Journal reported today. Lawmakers told the Securities and Exchange Commission nearly three years ago to shake up the bond-rating industry's "issuer pays" business arrangement, where clients pay firms such as Standard & Poor's Ratings Services and Moody's Investors Service for their letter grades. Very little has changed as a SEC report that was widely expected to announce regulatory changes arrived six months late—and proposed more discussion rather than an overhaul. At an all-day meeting tomorrow, the agency is seeking advice from 26 experts, including S&P President Douglas Peterson and Kroll Bond Rating Agency Inc. Chairman and Chief Executive Jules Kroll. The SEC declined to comment on the delayed report or how long it might take to make any changes to the issuer-pays model for rating deals backed by mortgages and other assets.
