EU wants co-operation with SEC on rating agencies: report

FRANKFURT (Reuters) - The European Commission wants to cooperate closely with the U.S. Securities and Exchange Commission (SEC) on the planned regulation of credit rating agencies, the German financial weekly Euro am Sonntag reported.

"Because of the importance of the U.S. financial markets it would make no sense to take action in isolation," the paper quoted Charlie McCreevy, the 27-mation European Union's internal market commissioner, as saying.

McCreevy hopes that a draft proposal would be ready in October, making it possible for a new regulatory framework to take effect next year, Euro am Sonntag said in a preview received on Saturday of an article due for publication in the weekly's print edition on Sunday.

The credit rating agencies include Standard & Poor's (S&P), a unit of McGraw Hill (MHP.N: Quote, Profile, Research, Stock Buzz), Moody's (MCO.N: Quote, Profile, Research, Stock Buzz) and Fitch, part of Fimalac (LBCP.PA: Quote, Profile, Research, Stock Buzz). The agencies have come under fire for their role in the U.S. subprime mortgage crisis, which led to a global credit squeeze and big asset write downs at many banks.

McCreevy outlined a five-point regulatory framework consisting of mandatory registration; measures to cope with potential conflicts of interest; quality standards and methods; transparency obligations; as well as reporting and supervision.

It remained open which entity would take charge of supervising the rating agencies, he said, adding there were various options such as "a stronger involvement of the CESR (Committee of European Securities Regulators) in Paris."

(Reporting by Peter Starck)