Morningstar Credit Ratings announced that it now qualifies as a 'rating agency' as defined by the U.S Department of Labor as a nationally recognized statistical rating organization (NRSRO). 

The Securities and Exchange Commission's Office of Credit Ratings adminsters the rules relating to NRSROs in order to protect investors, promote capital formation and maintain fair as well as efficent markets through the oversight of credit rating agencies.

"The Department of Labor amendment is a critical step toward increasing competition in the rating agency industry by creating a level playing field for all NRSROs," Joe Petro, managing director of Morningstar’s structured credit ratings business, said.

He added, "This development will provide more options to both issuers and the employee benefit plans that are governed by ERISA, which utilize credit ratings and rating agency analysis as part of their investment process."

Ratings agencies have faced criticism for over-rating mortgage-backed and other asset-backed securities created by their clients but that were comprised of assets that turned out to be toxic.

Since the subprime mortgage failout, many have called for regulation of the firms and enhanced transparency of such credit rating agencies.