President George W. Bush signed the Credit Rating Agency Reform Act into law last week, setting in motion substantial changes that could revamp the rating agency business by next year.

The law combines elements from the Senate and House of Representatives versions of the bill, which were adopted days before the president granted it final approval. Proponents say it will bring much-needed competition to the rating agency business, by allowing more than 130 rating agencies to potentially apply for and receive status as nationally recognized statistical rating organizations (NRSROs). The legislation also gives the Securities and Exchange Commission oversight of the industry.

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