(4)According to the first condition, credit rating agencies in the third country must be subject to authorisation or registration and subject to effective supervision and enforcement on an ongoing basis. The US legal and supervisory framework for credit rating agencies consists of the Credit Rating Agency Reform Act of 2006 (‘Rating Agency Act’) which seeks to improve the quality of ratings in order to protect investors and in the public interest, by fostering accountability, transparency, and competition in the credit rating industry and Section 15E 3 , Section 17 4 and Section 21B(a) 5 of the Securities Exchange Act (‘Exchange Act’). The operative provisions of the Rating Agency Act became applicable upon the SEC’s adoption in June 2007 of a series of rules implementing a registration and oversight programme for credit rating agencies that register as Nationally Recognized Statistical Ratings Organizations (NRSRO). In order to allow the use of their ratings for regulatory purposes credit rating agencies have to register with the SEC and are subsequently supervised by the SEC on an ongoing basis. The SEC is endowed with a comprehensive range of supervisory powers allowing it to investigate whether credit rating agencies comply with their legal obligations. Those powers include the power to access documents, to conduct investigations and to carry out on-site inspections, as well as the power to require access to records of telephone recordings and electronic communication. The SEC can exercise these powers not only in respect of credit rating agencies, but also in respect of other persons involved in credit rating activities. Section 15E(p)(3)(A) of the Exchange Act requires the SEC to conduct an examination of each NRSRO at least annually and to report on the findings of these examinations 6 . Where the SEC has established that an NRSRO is in breach of any obligation arising from the relevant regulatory framework, it may adopt a wide range of supervisory measures in order to stop the infringement. Those measures include the power to withdraw the registration, to suspend the use of ratings for regulatory purposes and to order the credit rating agencies to stop the infringement. The SEC can also impose severe penalties on credit rating agencies for breaches of the relevant requirements. Therefore, NRSROs are subject to effective supervision and enforcement on an ongoing basis. The cooperation agreement concluded between ESMA and the SEC provides for information exchange with regard to enforcement and supervisory measures taken against cross border CRAs.