June 26, 2018

ESMA published the responses received to its consultation on draft guidelines on “as stringent as” notion in the CRA Regulation. The consultation was issued on March 27, 2018 and comment period ended on May 25, 2018. ESMA published responses from four institutions, three of which are credit rating agencies—namely, Rating-Agentur Expert RA GmbH, A.M. Best Europe-Rating Services Limited, and Moody's Investors Service Ltd. U.S. Chamber of Commerce, Center for Capital Markets Competitiveness, was the other respondent.

This consultation followed on from the updated Guidelines on endorsement (November 2017) and was in response to requests from the industry.  The aim of the proposed supplementary guidance is two-fold:

  • To provide clarity regarding the general principle, ESMA relies on when assessing whether an alternative requirement can be considered as stringent as a requirement set out in the CRA Regulation
  • ESMA’s concrete assessment of a number of alternative internal requirements, which are in place in a third-country credit rating agency (CRA)

In the updated guidelines on endorsement, ESMA had clarified that compliance with the third-country legal framework will no longer be considered proof that a third-country CRA fulfills requirements that are at least as stringent as those set out in the CRA Regulation. Instead, an endorsing CRA has two options to demonstrate to ESMA that the "as stringent as" condition is met: either stating that the third-country CRA complies with the relevant provisions of CRA Regulation or stating that the third-country CRA has established and fulfills alternative internal requirements, which are at least as stringent as the relevant endorsement provisions of CRA Regualtion.


Related Link: Consultation and Responses

Keywords: Europe, EU, Securities, CRA Regulation, Endorsement Regime, Responses to Consultation, ESMA

Related Articles
News

FSB to Evaluate Effects of Too-Big-To-Fail Reforms for Systemic Banks

FSB is seeking feedback as part of its evaluation of the effects of the too-big-to-fail reforms for banks.

May 23, 2019 WebPage Regulatory News
News

APRA Releases Minor Changes to Reporting Standards on SA-CCR for Banks

APRA released minor changes to the three reporting standards for the standardized approach for measuring counterparty credit risk exposures (SA-CCR).

May 22, 2019 WebPage Regulatory News
News

APRA on Industry Self-Assessments into Governance and Accountability

APRA released an information paper analyzing the self-assessments performed by 36 of the country’s largest banks, insurers, and superannuation licensees in response to the final report on the Prudential Inquiry into the Commonwealth Bank of Australia (CBA).

May 22, 2019 WebPage Regulatory News
News

PRA Consults on Maintenance of TMTP Under Solvency II

PRA published a consultation paper (CP11/19) that sets out its approach to update supervisory statement (SS6/16) on maintenance of the transitional measure on technical provisions (TMTP) under Solvency II.

May 22, 2019 WebPage Regulatory News
News

APRA Proposes to Amend Guidance on Residential Mortgage Lending

APRA is consulting on revisions to the prudential practice guide APG 223 on residential mortgage lending in Australia.

May 21, 2019 WebPage Regulatory News
News

IASB Proposes Improvements to IFRS 9 and IFRS 16

IASB published the exposure draft ED 2019/2 that proposes amendments to four IFRS standards, including IFRS 9 on Financial Instruments and IFRS 16 on Leases.

May 21, 2019 WebPage Regulatory News
News

Denis Beau of BDF on Supervisory Priorities for Climate-Change Risks

Denis Beau, the First Deputy Governor of BDF, delivered opening remarks at the BCBS-BSCEE-FSI High-level Meeting for Europe on banking supervision.

May 21, 2019 WebPage Regulatory News
News

ISDA CDM to be Deployed for UK Digital Regulatory Reporting Pilot

ISDA announced deployment of the ISDA Common Domain Model (ISDA CDM 2.0) to support the UK FCA, BoE, and participating financial institutions in testing phase two of the Digital Regulatory Reporting pilot for derivatives.

May 21, 2019 WebPage Regulatory News
News

MAS to Consolidate Regulation of Merchant Banks Under Banking Act

MAS published a consultation paper that proposes to consolidate the regulation of merchant banks under the Banking Act and to move merchant banks to a licensing regime under the MAS Act.

May 21, 2019 WebPage Regulatory News
News

ESAs Amend Technical Standards on Mapping of ECAIs Under CRR

ESAs published a second amendment to the implementing technical standards on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs) for credit risk under the Capital Requirements Regulation (CRR).

May 20, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3118