SEC Agrees To Securities Classification Change

Law360, New York (October 16, 2008, 12:00 AM EDT) -- The U.S. Securities and Exchange Commission has agreed to allow financial institutions to delay write-downs on certain investments tarnished by the credit crisis by changing how the securities can be classified under accounting regulations.

Called “perpetual preferred securities,” the investments are often structured like stock but possess "'debt-like’ characteristics,” Conrad Hewitt, chief accountant for the SEC said to Financial Accounting Standards Board Chairman Robert Herz in a letter dated Tuesday.

In the letter, Hewitt said the SEC’s accounting office would allow financial institutions to treat the...
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