The gatekeeper's liability of credit rating agencies for disclosure under Securities codes -- the reform and the applicability to Japan's legal framework

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Structured finance products is well-known to have played a key role to cause the credit market to collapse in and after 2007. The analysis focuses on the deficient rule and practice that excepted credit rating agencies from the disclosure liability and the historical background that developed the liability excuse therefor with respect to those debt securities. The liability excuse brought about dozens of lawsuits against credit rating agencies, with regard to which the cause of action is discussed. It also gives comparative analysis of enforceability of the ipso facto clause and anti-deprivation principle -- U.S. and U.K. law -- in events of bankruptcy occurring to the specially formed securities offering entity engaged in derivatives transactions that accord with the I.S.D.A. Master Agreement. The note discusses the likelihood of thehegatekeeper's liability reform and the manner of application to Japan's legal framework.