S&P Global Ratings lowered Options Clearing Corp.'s long-term issuer credit rating to AA from AA+ and removed the rating from CreditWatch with negative implications.
The outlook on the rating is negative.
The downgrade follows the announcement that Options Clearing has entered into a cease and desist order with the SEC and the U.S. Commodity Futures Trading Commission to remediate deficiencies related to the implementation of policies involving financial risk management, operational requirements and information systems security. The company will pay $20 million in penalties for failing to implement policies to manage risks as required by SEC and CFTC rules.
Prior to this downgrade, the rating was already influenced by ongoing regulatory action after the SEC disapproved the company's capital plan in February. The current outlook reflects that the rating agency would negatively view any substantial delay in the company receiving approval for its proposed capital management policy or its ability to meet certain liquidity standards or reports of further substantive governance problems. The rating agency could further downgrade the ratings if the company cannot meet the requirements of the settlement orders in the regulator's time frame.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings.
