The Securities and Exchange Commission's internal watchdog faulted the agency's oversight of credit-rating firms, saying it was slow to carry out regulations and in "certain instances" failed to comply with U.S. rules.

"The commission has historically been slow to act in this area," SEC Inspector General David Kotz said in a report posted to the regulator's Web site Friday. "While, beginning in 1994, the SEC issued concept releases, conducted examinations, issued reports, held hearings and proposed regulations, it adopted no regulations" for recognized credit raters until it was forced to do so by an act of Congress in 2006.

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