Egan-Jones Responds to SEC Order for Asset-Backed and Government Securities Rating Resumption
On March 23, 2026, Egan-Jones Ratings Company formally addressed an order issued by the Securities and Exchange Commission (SEC) that mandates a comprehensive review of their application to resume ratings for issuers of asset-backed and government securities. This development emerges from an ongoing process aimed at enhancing the competitive landscape of the credit rating industry, which has faced criticism over the years.
The SEC's order requires a decision regarding Egan-Jones' application by August 12, 2026. Sean Egan, the company's co-founder and CEO, emphasized their commitment to supporting the application with necessary information, underlining the strides made within the company's internal and compliance frameworks. His confidence in the progress made is coupled with their belief that such advancements will be apparent to the SEC.
Historically, Egan-Jones has gained respect for its independent and reliable ratings, distinguishing itself by the practice of having investors pay for its ratings rather than issuers—a model that promotes impartiality. The firm believes that resuming ratings for asset-backed and government securities will contribute positively to market competition, an objective echoed by U.S. Congress. Additionally, Egan-Jones has reiterated its confidence in addressing any inquiries that may arise from the SEC during the review process.
The context for this application can be traced back to the criticisms faced by legacy rating agencies following the 2008 financial crisis. These agencies were seen as facilitating the collapse of capital markets, prompting Congress to push for increased competition. Despite the intent, the market has largely been dominated by a few well-established firms, which have faced skepticism again in light of recent corporate failures. Egan-Jones is positioned to assert its role in changing this dynamic, aiming to provide more trustworthy ratings in these critical financial instruments.
In 2025, Egan-Jones applied for supplementary licenses for asset-backed securities and government securities, licenses they previously held. An application supplement was submitted on January 14, 2026. The ongoing formal review allows them to demonstrate their qualifications for reclaiming these licenses, which are essential for rating both asset-backed and sovereign securities in the current financial landscape.
Egan-Jones was founded in 1995 as a Nationally Recognized Statistical Rating Organization (NRSRO) and has maintained a focus on delivering timely and accurate credit evaluations along with proxy services. The company’s assertion of independence stems from its business model, where it primarily serves the interests of investors. This model reinforces the integrity of its ratings amidst allegations that traditional ratings organizations have conflicts of interest.
The firm is optimistic that its continued efforts will resonate with the SEC, reinforcing its credibility in the sector amidst the ongoing dialogue about reforming the credit ratings agencies' operations. As it navigates through this significant review, Egan-Jones is committed to providing the SEC with detailed evidence of their firm’s qualifications, thereby reinforcing their reputation and service credibility within the financial markets. The anticipated outcome of the review will bear considerable importance for Egan-Jones and the overall dynamics of credit ratings agencies, shedding light on the evolution of trust in financial ratings moving forward.
In conclusion, as Egan-Jones responds to these regulatory challenges, it continues to advocate for a more competitive and transparent ratings environment. The firm’s proactive approach in addressing the SEC order not only signifies its commitment to compliance but also its vision of contributing to enhanced competitiveness within the market for credit ratings, ultimately aiming to restore investor confidence and improve the reliability of ratings for asset-backed and government securities.
The SEC's order requires a decision regarding Egan-Jones' application by August 12, 2026. Sean Egan, the company's co-founder and CEO, emphasized their commitment to supporting the application with necessary information, underlining the strides made within the company's internal and compliance frameworks. His confidence in the progress made is coupled with their belief that such advancements will be apparent to the SEC.
Historically, Egan-Jones has gained respect for its independent and reliable ratings, distinguishing itself by the practice of having investors pay for its ratings rather than issuers—a model that promotes impartiality. The firm believes that resuming ratings for asset-backed and government securities will contribute positively to market competition, an objective echoed by U.S. Congress. Additionally, Egan-Jones has reiterated its confidence in addressing any inquiries that may arise from the SEC during the review process.
The context for this application can be traced back to the criticisms faced by legacy rating agencies following the 2008 financial crisis. These agencies were seen as facilitating the collapse of capital markets, prompting Congress to push for increased competition. Despite the intent, the market has largely been dominated by a few well-established firms, which have faced skepticism again in light of recent corporate failures. Egan-Jones is positioned to assert its role in changing this dynamic, aiming to provide more trustworthy ratings in these critical financial instruments.
In 2025, Egan-Jones applied for supplementary licenses for asset-backed securities and government securities, licenses they previously held. An application supplement was submitted on January 14, 2026. The ongoing formal review allows them to demonstrate their qualifications for reclaiming these licenses, which are essential for rating both asset-backed and sovereign securities in the current financial landscape.
Egan-Jones was founded in 1995 as a Nationally Recognized Statistical Rating Organization (NRSRO) and has maintained a focus on delivering timely and accurate credit evaluations along with proxy services. The company’s assertion of independence stems from its business model, where it primarily serves the interests of investors. This model reinforces the integrity of its ratings amidst allegations that traditional ratings organizations have conflicts of interest.
The firm is optimistic that its continued efforts will resonate with the SEC, reinforcing its credibility in the sector amidst the ongoing dialogue about reforming the credit ratings agencies' operations. As it navigates through this significant review, Egan-Jones is committed to providing the SEC with detailed evidence of their firm’s qualifications, thereby reinforcing their reputation and service credibility within the financial markets. The anticipated outcome of the review will bear considerable importance for Egan-Jones and the overall dynamics of credit ratings agencies, shedding light on the evolution of trust in financial ratings moving forward.
In conclusion, as Egan-Jones responds to these regulatory challenges, it continues to advocate for a more competitive and transparent ratings environment. The firm’s proactive approach in addressing the SEC order not only signifies its commitment to compliance but also its vision of contributing to enhanced competitiveness within the market for credit ratings, ultimately aiming to restore investor confidence and improve the reliability of ratings for asset-backed and government securities.
Topics Financial Services & Investing）
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