US authorities are clamping down on credit rating agencies following heavy criticism of their conduct in the run-up to the financial crisis.

The Securities and Exchange Commission said last night that it is taking action to make ratings agencies more accountable. It also vowed to restrict the practice of "rating shopping" – where a company would privately approach several agencies to learn what rating they would be awarded.

SEC chairman Mary Schapiro said she was acting because investors who relied on credit ratings have been let down.

"That reliance did not serve them well over the last several years, and it is incumbent upon us to do all that we can to improve the reliability and integrity of the ratings process and give investors the appropriate context for evaluating whether ratings deserve their trust," explained Schapiro.

Ratings agencies have been heavily criticised since the financial crisis began, amid claims that they handed out ratings to financial securities without properly considering the health of their underlying assets. One cause of the credit crunch was the fear that apparently safe investments did in fact contain toxic debts, such as sub-prime mortgages.

The ratings sector is dominated by Standard & Poor's, Moody's and Fitch. Under the SEC's plan, the agencies would have to publish historical data so that investors could have a better view of their past performance. It also hopes to encourage rivals to issue more unsolicited ratings, by making agencies release the underlying data they used when assessing a financial product.

Although the SEC is not banning ratings shopping outright, the moves announced last night would force a company to say if it had obtained "pre-ratings" from other agencies.

In a separate move, the SEC proposed banning a practice called "flash trading" – in which certain clients on a stock exchange learned about buy and sell orders a fraction of a second before other traders.

Schapiro said there was a danger that flash orders created "a two-tiered market by allowing only selected participants to access information about the best available prices for listed securities."

Flash orders are popular with investors which used sophisticated computer-based trading strategies. The Nasdaq and BATS exchanges had already stopped allowing flash orders earlier this month, but they are still offered by the third US stock exchange, Direct Edge.

In detail

The SEC's statement announcement included six key points:

• Rules to provide greater information concerning ratings histories – and to enable competing credit rating agencies to offer unsolicited ratings for structured finance products, by granting them access to the necessary underlying data for structured products.

• Amendments that would seek to strengthen compliance programmes through requiring annual compliance reports and enhance disclosure of potential sources of revenue-related conflicts.

• Amendments to the Commission's rules and forms to remove certain references to credit ratings by nationally recognised statistical rating organisations.

• Reopening the public comment period to allow further comment on Commission proposals to eliminate references to NRSRO credit ratings from certain other rules and forms.

• Proposing new rules that would require disclosure of information including what a credit rating covers and any material limitations on the scope of the rating. Also disclosure of information on whether any "preliminary ratings" were obtained from other rating agencies – in other words, whether there was "ratings shopping".

• Seeking public comment on whether to amend Commission rules to subject NRSROs to liability when a rating is used in connection with a registered offering by eliminating a current provision that exempts NRSROs from being treated as experts when their ratings are used that way.