ESMA published a consultation on the disclosure requirements applicable to credit ratings. The paper consults on Credit Rating Agency (CRA) guidelines aimed to improve the quality and consistency of disclosures of environmental, social, and governance (ESG) factors when considered as part of a credit rating action. ESMA will accept responses to the consultation by March 19, 2019 and it expects to publish the final report by July 30, 2019.
The consultation paper proposes measures in the following areas:
- Guidance to improve the quality and consistency of the information that is disclosed alongside the issuance of a credit rating in a publicly available press release
- Guidance to improve the transparency of credit rating press releases concerning the extent to which sustainability factors have been considered as part of a credit rating
- A cost-benefit analysis of the Guidelines in Annex I of the consultation paper
The guidance is intended to improve the quality of disclosures by CRAs in a manner that provides the users of credit ratings with greater transparency on whether Environmental, Social, or Governance factors were considered a key underlying element of a credit rating issuance. Although this is not a subject that is addressed explicitly under the CRA Regulation, ESMA recognizes that, in context of the EC Action Plan for sustainable finance, it is desirable to provide some guidance to the industry to ensure that the quality of disclosures can support investors needs in light of the greater focus that is now being placed on sustainability factors in investment decisions. The guidelines are in line with the EC Action Plan on sustainable finance.
Comment Due Date: March 19, 2019
Keywords: Europe, EU, Banking, Insurance, Securities, CRA Regulation, CRA, Disclosures, ESG, Sustainable Finance, ESMA
Previous ArticleSRB on 2019 Priorities for MREL, SRF, and Resolvability Assessment
FSB finalized the toolkit of effective practices to assist financial institutions in their cyber incident response and recovery activities.
HKMA urged authorized institutions to take early action to adhere to the IBOR Fallbacks Protocol, which ISDA is expected to publish soon.
FSB published a global transition roadmap for London Inter-bank Offered Rate (LIBOR).
HM Treasury published a document that summarizes the responses received from a consultation on the approach of UK to transposition of the revised Bank Resolution and Recovery Directive (BRRD2).
HM Treasury published the government response to the feedback received on the consultation for updating the prudential regime of UK before the end of the Brexit transition period.
In a recent statistical notice, BoE announced publication of the reporting schedule for statistical returns for 2021.
EC welcomed the joint declaration by 25 EU member states on building the next generation of cloud in Europe.
PRA published the final policy statement PS22/20, which contains the updated supervisory statement SS12/13 on counterparty credit risk.
FSB published an update on its work to address market fragmentation. FSB is working in this area in collaboration with the other standard-setting bodies.
EBA proposed revisions to the guidelines on major incident reporting under the second Payment Service Directive (PSD2).