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October 11, 2017

IOSCO published a report on Other CRA Products (OCPs), which provides market participants with a better understanding of certain non-traditional products and services offered by credit rating agencies (CRAs). In November 2016, IOSCO had published a consultation paper with a view to report on IOSCO's understanding of OCPs.

The final report on OCPs describes six groups of OCPs and their current status, along with business practices and trends within the CRA industry. The report concludes that OCPs should be responsive to the spirit of the four high-level objectives set forth in the IOSCO "Principles Regarding the Activities of CRAs"; these high-level objectives relate to the quality and integrity of the rating process; independence and conflicts of Interest; transparency and timeliness of ratings disclosure; and confidential information. The report observes that the legal and/or corporate organizational structures chosen by CRAs to engage in an activity or offer a service or product are not indicative of whether they are subject to the Code of Conduct. 


The non-traditional products (that is, OCPs) may include, for example, private ratings, confidential ratings, expected ratings, indicative ratings, prospective ratings, provisional ratings, preliminary ratings, one-time ratings, regional ratings, national ratings, point-in-time ratings, scoring, credit default swap spreads, bond indexes, portfolio assessment tools, credit assessments, rating assessments, assessments, fund ratings, data feeds, research, or other tools. Although OCPs and services are distinct from commonly identified issuer-paid or subscriber-paid traditional credit ratings, they may be used by market participants to make investment and other credit-related decisions. Issuers and obligors may also use them to make decisions about whether to obtain a traditional credit rating from a particular CRA. Market participants may use Other CRA Products for the following purposes:
  • To assess the creditworthiness of an entity or obligation, in addition to, or instead of, relying on Traditional Credit Ratings
  • To understand the impact that a hypothetical or proposed transaction would have on a Traditional Credit Rating
  • To understand how a credit rating agency would ultimately rate a new issuance and as part of conducting risk assessments

Related Links

Keywords: International, Securities, CRA, Other CRA Products, IOSCO

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