July 27, 2018

The EFTA Surveillance Authority (ESA) has approved the registration of the Norwegian entity Nordic Credit Rating AS (NCR) as a credit rating agency with effect from 3 August 2018. NCR is based in Oslo, Norway, with a branch in Stockholm, Sweden. NCR intends to issue corporate ratings.

The decision was adopted by the EFTA SA on the basis of a draft prepared by ESMA, which is the EU’s single supervisor for credit rating agencies (CRAs). EFTA SA and ESMA will supervise NCR. To be registered as a CRA, a company must be able to demonstrate that it can comply with the requirements of the CRA Regulation, including on the:

  • Governance of CRAs and the management of conflicts of interest
  • Development and application of methodologies for assessing credit risk
  • Disclosure of information to ESMA and to market participants

Once registered, CRAs are subject to ongoing supervision and monitoring. In this case, NCR will be subject to ongoing supervision and monitoring by EFTA SA and ESMA, respectively, to make sure that the firm continues to meet the conditions for registration. EFTA SA, on the basis of drafts prepared by ESMA, can impose sanctions and/or penalties where it finds that a CRA has failed to meet its obligations under the CRA Regulation, as incorporated in the EEA Agreement. The CRA Regulation seeks to ensure that credit ratings issued in the EU respect minimum standards of quality, transparency, and independence by providing that only companies registered as CRAs may lawfully issue credit ratings that can be used for regulatory purposes by credit institutions, investment firms, insurance and reinsurance undertakings, institutions for occupational retirement provision, management companies, investment companies, alternative investment fund managers, and central counterparties. 


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Keywords: Europe, EU, Banking, Securities, CRA, CRA Regulation, Nordic Credit Rating, ESMA

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