General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
November 17, 2017

ESMA published the final report updating its guidelines on the application of the endorsement regime under the Credit Rating Agencies (CRA) Regulation. The guidelines on the application of the endorsement regime will take effect on January 01, 2019. ESMA also published its final report on Technical Advice on CRA regulatory equivalence—CRA 3 update. CRA 3 will enter into force on June 01, 2018 for the purposes of endorsement and equivalence.

The report on the application of endorsement regime details a number of changes and clarifications to the existing guidelines. The updates focus on the obligations of the endorsing CRA, the conduct of the third-country CRA, and the third-country legal and supervisory framework. The report also clarifies ESMA’s supervisory powers over endorsed credit ratings and the notion of objective reasons. The effective date of January 01, 2019 for the endorsement regime will allow CRAs sufficient time to adapt policies and procedures to take into account ESMA’s additional guidance on the requirements, which are as stringent as EU requirements that are to be developed by ESMA in 2018. The final report on the Technical Advice to the EC assesses the legal and supervisory framework of the nine jurisdictions (Argentina, Australia, Brazil, Canada, Hong Kong, Japan, Mexico, Singapore, and United States), which until now have been eligible for equivalence and endorsement.

The entry into force of the 2013 amendments to the CRA Regulation (CRA 3), and the associated introduction of new requirements to endorsed ratings in 2018, provided an opportunity for ESMA to review the regime more broadly. Endorsement is a regime under the CRA Regulation, which allows credit ratings issued by a third-country CRA, and endorsed by an EU CRA, to be used for regulatory purposes in the EU. Endorsement is used by the largest CRAs in the EU. Equivalence allows a non-systemic CRA without any physical presence in the EU to be certified by ESMA. At present, four certified CRAs located in three non-EU jurisdictions rely on this regime. ESMA has concluded that the local legal and supervisory frameworks of these three jurisdictions, as well as those of Canada and Hong Kong, meet the objectives of the additional CRA 3 requirements for the purposes of equivalence. The countries whose legal and supervisory frameworks were assessed as not fully meeting the requirements are Argentina, Australia, Brazil and Singapore. However, the CRAs established in these jurisdictions currently rely only on the endorsement regime—not on equivalence.

 

Related Links

Keywords: Europe, EU, Securities, CRA 3, CRA Regulation, Equivalence, Endorsement Regime, ESMA

Related Articles
News

EBA Single Rulebook Q&A: Third Update for March 2019

EBA published answers to seven questions under the Single Rulebook question and answer (Q&A) updates for this week.

March 15, 2019 WebPage Regulatory News
News

EBA Publishes Report on Convergence of Supervisory Practices Across EU

EBA published annual report on the convergence of supervisory practices in EU.

March 14, 2019 WebPage Regulatory News
News

CPMI-IOSCO Publish Update to Level 1 Assessment of PFMI Implementation

CPMI and IOSCO jointly updated the Level 1 Assessment Online Tracker on monitoring of the implementation of the Principles for financial market infrastructures (PFMI).

March 14, 2019 WebPage Regulatory News
News

Agustín Carstens of BIS Speaks About New Role of Central Banks

While speaking at the 20th anniversary conference of the Financial Stability Institute (FSI), Agustín Carstens, the General Manager of BIS, highlighted the need for regulatory actions in light of the continued evolution of financial technology.

March 14, 2019 WebPage Regulatory News
News

PRA Publishes Policy Statement on Group Supervision Under Solvency II

PRA published a policy statement (PS9/19) that provides feedback on responses to the consultation paper CP15/18 and the final supervisory statement SS9/15 (Appendix) on group supervision under Solvency II.

March 14, 2019 WebPage Regulatory News
News

PRA Proposes to Update the Pillar 2 Capital Framework for Banks

PRA is proposing (CP5/19) to update the Pillar 2 capital framework to reflect continued refinements and developments in setting the PRA buffer (Pillar 2B).

March 13, 2019 WebPage Regulatory News
News

PRA Publishes Policy Statement Related to Credit Risk Mitigation

PRA published a policy statement (PS8/19) that contains the final policy in the updated supervisory statement SS17/13 on credit risk mitigation (Appendix 1) as well as the statement SS31/15 on Internal Capital Adequacy Assessment Process (ICAAP) and the Supervisory Review and Evaluation Process or SREP (Appendix 2).

March 13, 2019 WebPage Regulatory News
News

FED Updates Supplemental Information and Q&A for Form FR Y-14

FED updated the supplemental instructions and the questions and answers (Q&A) document for the information collection on capital assessments and stress testing, which is covered by the reporting form FR Y-14A.

March 13, 2019 WebPage Regulatory News
News

EC Amends Regulations on Clearing Obligation for Derivative Contracts

EC published the Delegated Regulation (EU) 2019/396 that supplements the European Market Infrastructure Regulation (EMIR) regarding the date at which the clearing obligation takes effect for certain types of contracts.

March 13, 2019 WebPage Regulatory News
News

BCBS Sets Prudential Expectations for Crypto-Asset Exposures of Banks

BCBS issued a statement setting out its prudential expectations for bank exposures to crypto-assets and related services, for the jurisdictions that do not prohibit such exposures and services.

March 13, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2739