Featured Product

    ESMA Supplements Guide to Endorsement Regime for Non-EU Credit Ratings

    July 18, 2018

    ESMA published supplementary guidance on the application of the endorsement regime for non-EU credit ratings under the Credit Rating Agencies Regulation (CRAR). To ensure that third-country credit ratings, which are endorsed for use by EU investors, meet requirements that are at least "as stringent as" those set out in CRAR, ESMA added a new section to its Guidelines on Endorsement, which were first published in November 2017. The guidelines will enter into force on January 01, 2019.

    The new section aims to assist EU CRAs in assessing whether a third-country CRA’s internal requirements meet the "as stringent as" test. This is done by setting out the general principles underpinning the "as stringent as" test and providing a non-exhaustive list of alternative internal requirements, which ESMA considers to pass the test. The identified alternative requirements relate to fees charged by CRAs, analyst rotation, pre-publication of issuer notification, certain rating disclosures (transparency report, initial reviews, and preliminary ratings), and the treatment of inside information. These supplementary guidelines will ensure an effective application of the 2013 amendments to CRAR (CRA3) for endorsed credit ratings and a high level of protection of European investors who use endorsed credit ratings for regulatory purposes.

    In 2017, ESMA had clarified that there are two ways for an EU CRA to ensure that an endorsed credit rating issued by a third-country CRA meets the "as stringent as" test. The EU CRA has verified, and is able to demonstrate that, either:

    • the conduct of the third-country CRA fulfills the relevant endorsement provisions of CRAR; or
    • the third-country CRA has established and adheres to alternative internal requirements, which are at least as stringent as the relevant endorsement provisions of CRAR.

     

    Related Links

    Effective Date: January 01, 2019

    Keywords: Europe, EU, Banking, Securities, CRA Regulation, CRA, Endorsement Regime, Third Country Credit Analysis, ESMA

    Related Articles
    News

    LEI ROC Confirmed as Governance Body for OTC Derivatives Identifiers

    FSB confirmed the Regulatory Oversight Committee (ROC) of the Global Legal Entity Identifier System (GLEIS) as the International Governance Body for the globally harmonized identifiers used to track over-the-counter (OTC) derivatives transactions, with effect from October 01, 2020.

    September 25, 2020 WebPage Regulatory News
    News

    FCA Consults on Regulation of International Firms in UK

    FCA is consulting on its approach to the authorization and supervision of international firms operating in UK.

    September 25, 2020 WebPage Regulatory News
    News

    EBA Launches Transparency Exercise for Banks in EU

    EBA launched the seventh annual transparency exercise for banks in EU.

    September 25, 2020 WebPage Regulatory News
    News

    EBA Publishes Single Rulebook Q&A Updates in September 2020

    The EBA Single Rulebook question and answer (Q&A) tool updates for this month include answers to 32 questions.

    September 25, 2020 WebPage Regulatory News
    News

    MAS Amends Notices on NSFR and Single Counterparty Credit Exposures

    MAS published amendments to the Notice 652 on net stable funding ratio (NSFR), along with the related reporting template.

    September 24, 2020 WebPage Regulatory News
    News

    EC Publishes Action Plan for Capital Markets Union in EU

    EC published the action plan to enhance the Capital Markets Union in EU over the coming years.

    September 24, 2020 WebPage Regulatory News
    News

    EC Proposes Frameworks for Crypto-Assets and Operational Resilience

    EC adopted a package that includes the digital finance and retail payments strategies and the legislative proposals for regulatory frameworks on crypto-assets and digital operational resilience.

    September 24, 2020 WebPage Regulatory News
    News

    ECB Publishes Opinion on Proposals to Amend Securitization Framework

    ECB published an opinion (CON/2020/22) on proposals for regulations amending the securitization framework of EU, in response to the COVID-19 pandemic.

    September 24, 2020 WebPage Regulatory News
    News

    APRA Updates Validation and Derivation Rules in September 2020

    APRA updated the lists of the Direct to APRA (D2A) validation and derivation rules for authorized deposit-taking institutions, insurers, and superannuation entities.

    September 24, 2020 WebPage Regulatory News
    News

    MAS Amends Notice on Capital Adequacy Requirements of Banks

    MAS published amendments to Notice 637 on the risk-based capital adequacy requirements for reporting banks incorporated in Singapore.

    September 23, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5845