The nation’s credit ratings agencies have 60 days to comment on proposed Securities and Exchange Commission rules that would require the companies to implement more internal controls and eliminate conflicts of interest that previously threatened the integrity of ratings on complex financial products. The rules mandate firms classified as “nationally recognized statistical rating organizations” file an annual report on the effectiveness and structure of internal controls, as well as reports on how the firms develop and assess the effectiveness of their credit ratings. Ratings agencies, including Moody’s Investors Service (MCO), Fitch Ratings and Standard and Poor’s, faced increased scrutiny after the 2008 financial meltdown revealed risky mortgage products backing securities sold to investors. The guidelines up for discussion would require an issuer or underwriter of ABS to report any findings and conclusions of a third-party due diligence provider. The proposal also addresses alleged conflicts of interest that arise when ratings agency employees participate on both the sales and marketing and ratings side of the business. The proposed rules would prevent this, SEC commissioners said Wednesday, but members of the commission acknowledged that smaller ratings firms would not be able to meet this provision because of their size. The SEC’s suggested mandates would also allow the regulator to suspend any agency’s registration if it discovers a violation of the conflict of interest provision. In addition, the proposals would implement a “look back” provision by which the credit agencies would be required to review the ratings of any employee who leaves his job to work at an issuer who received a rating within the prior 12 months. Other suggested guidelines include a rule to require agencies to disclose ratings performance statistics to investors, another rule designed to increase disclosure about the history of a firm’s ratings and methodology. Write to: Kerri Panchuk.