SEC approves fourth credit-rating agency

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Tuesday, Feb. 25, 2003 | 9:36 a.m.

WASHINGTON -- The Securities and Exchange Commission on Monday granted official status to a fourth credit-rating agency, Dominion Bond Rating Service of Canada, the first such move in decades affecting a field dominated by three big companies.

Wall Street credit-rating agencies, among the players blamed by lawmakers for the massive accounting failure at Enron Corp., are being scrutinized by the Securities and Exchange Commission for possibly stifling competition in their field.

Critics have asserted that the official status granted by the SEC has given the three big agencies -- Moody's Investors Service, Standard & Poor's and Fitch Ratings -- an unfair monopoly and dampens competition.

The agencies' grading of companies' creditworthiness is closely watched by the markets and can determine whether banks and other financial institutions invest in a company. Despite their power, the SEC allows them to largely police themselves.