The US Securities and Exchange Commission has taken the final step in fulfilling a congressional mandate to reduce reliance on, and references to, credit ratings in agency regulations.

In the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress enacted comprehensive reforms to the credit ratings system.

SEC commissioner Jaime Lizárraga said in a statement that he supports the adoption of Tuesday’s final rules.

He said: “I would like to commend all the commission staff that worked on this rule and the other rules to fulfil the mandate under Section 939A of the Dodd-Frank Act.”

He said that in the 2011 Final Report, the Financial Crisis Inquiry Commission found that “the failures of credit-rating agencies were essential cogs” in the 2008 financial crisis.

The report concluded that the “crisis could not have happened without the rating agencies”.

He added: “These entities’ ratings were key to the marketing and sales of mortgage-backed securities, relied on by investors to make informed investment decisions — flaws and conflicts of interest notwithstanding. In some instances, federal regulations required the use of credit ratings.

“As the 2011 report noted, the markets’ — and, at times the federal government’s — reliance on credit ratings that turned out to be highly misleading had consequences that reverberated ‘throughout the financial system’. And not in a good way.

“In today’s final rules, the commission is replacing the references to credit ratings in Rules 101 and 102 of Regulation M with an alternative standard of creditworthiness that relies on credit-risk models.

“This alternative approach is designed to minimise the risk of evasion and manipulation of the new creditworthiness standard.”