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Standard & Poor calls for regulation in rating agencies

Standard & Poor’s on  Friday called for industry-wide regulation to restore confidence in rating agencies, giving its initial take on a draft bill that would put credit raters on a short leash.

McGraw-Hill Co’s (MHP.N) credit agency Standard & Poor’s also said that reform should increase competition and not create new barriers to entry.

According to Reuters report, “Our goals remain the same: bolstering investor confidence, improving the performance of ratings and increasing transparency,” the company said in a statement.

Lawmakers and regulators are seeking to hold credit raters more accountable after they helped fuel the financial crisis by assigning top ratings to mortgage-backed securities that later crumbled in value.

Under a draft bill being circulated by Representative Paul Kanjorski, a senior Democratic lawmaker, U.S. securities regulators could dictate how credit rating agencies determine ratings.

The Securities and Exchange Commission would be given the authority to write rules for the methods and procedures the credit agencies use to rate securities, the draft bill said.

Standard & Poor’s said in a statement that it would study the proposed provisions in the draft bill and will continue to work with policy makers in Washington, D.C.

Meanwhile in the United Stares , stock and mixed-equity funds (+15.0 billion) and bond funds (+$42.3 billion) attracted net new money in August, while money market funds (-$40.5 billion) posted net outflows for the seventh consecutive month.

Investors found comfort in multi-cap funds (+1.7 billion), mid-cap funds (+$1.6 billion), and small-cap funds (+$2.0 billion), while large-cap funds saw net outflows of $4.7 billion.

For the month World Equity Funds (+$5.4 billion) drew in the second largest flows of Lipper’s four equity macro-classifications.
Commodities Funds, with net inflows of $627 million, led the Sector Equity group for the eighth consecutive month.

– For the fifth consecutive month Mixed-Equity Funds experienced net inflows in August, drawing in $8.0 billion. Mixed-Asset Target Allocation Moderate Funds attracted the largest inflows of the life cycle and life stage funds at $1.9


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