Spectrum’s Code of Professional Conduct (COC) is the first chapter of Spectrum’s Compliance Manual (“Manual”). The COC frames our corporate culture and values, aligning them with Spectrum’s mission, standards and principles; and concretizing their application to our daily work.
All rating, research and IT staff, management and directors (Responsible Persons or RPs) must consent annually to comply with the letter and spirit of the Code and all Spectrum information systems and processes for producing credit information must support our declared commitments.
DECLARATION IN RESPECT OF SPECTRUM’S FRANCHISE: A COMMITTED FIDUCIARY
Spectrum is a member of the credit rating agency (CRA) industry, which in the ordinary course of business has ready access to a broad spectrum of sensitive data and information, and which is relatively closed to competition. These circumstances do little to prevent the risk of agency conflicts. CRAs have been known to skew informational outputs imperceptibly to advantage certain clients over others, sustaining their edge by intentionally omitting disclosures about internal processes, or by failing to upgrade their systems in light of documented biases and errors. External regulation can motivate conflict management, but the first best defenses of CRA franchise quality are its values, knowledge and capacity for self-governance.
At Spectrum we take pride in upholding rigorous professional standards. Since founding, our mission has been to serve the financial ecosystem as a standards-setter and fiduciary. Our duty of care is to provide debt capital suppliers and users with credit information of the highest quality and relevance to financial decision-making. We commit to treating all people in our sphere honestly and with decency; to evaluate capital quality in all forms using uniform principles; and to invest the resources in our people and systems to remain best-in-class.
All Spectrum RPs are to be treated with respect and dignity as professionals. They are expected to behave ethically on the job and master the skills and knowledge necessary to carry out their work at a Spectrum quality standard.
Each year, the CEO of Spectrum renews these commitments on behalf of Spectrum with a signed certification of the current version of the COC. All RPs are required to do likewise within six weeks of commencing employment at Spectrum, and annually thereafter.
DECLARATIONS IN RESPECT OF CREDIT INFORMATION: QUALITY, TRANSPARENCY, CONFLICTS
Spectrum publishes detailed current information about our risk architecture. CRAs influence what happens to public money, and we believe the public has a right to demand accountability. We disseminate information on www.creditspectrum.io/selfgovernance about principles, methodologies and approaches, including our white paper on the 5Is of Credit Information, and publish year-end self-reports based on the SEC Form NRSRO template.
The 5Is is a uniform set of standards from which all Spectrum products draw. It brings together the 5Cs of credit (character, conditions, collateral, capital, capacity) and three definitions of moneyness (unit of measure, store of value, medium of exchange), to comprehensively address credit’s quality and financial properties in our products.
Information about Spectrum can also be found on the web and in the public domain. Founders Rutledge and Raynes built the first graduated program of instruction for structured finance. Key contents can be viewed in The Analysis of Structured Securities (2003) or Elements of Structured Finance (2010) published by Oxford University Press.