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    ESMA Calls for Legislative Changes to Improve Access to Credit Ratings

    September 30, 2021

    The European Securities and Markets Authority (ESMA) published an opinion on how the access to, and use of, credit ratings can be improved in the European Union. In the opinion, ESMA highlights the difficulties experienced by users of credit ratings and recommends that the legislators should amend the Credit Rating Agencies (CRA) Regulation or take alternative legislative action to address these issues.

    At present, credit ratings are published on the websites of credit rating agencies and on the European Rating Platform or ERP. However, the usability of these credit ratings is severely limited, as the ratings cannot be accessed in a machine-readable format or downloaded in sufficient numbers to be used for regulatory purposes. Users mainly access and use credit ratings and related research reports through licenses for data feeds and platform services offered by other companies in the CRA groups. These companies are not subject to regulation, on top of which their licensing practices and their high fees raise investor protection and competitiveness concerns. Users of credit ratings have reported that the terms of the license agreements they must enter into to use credit ratings are subject to frequent changes and that they often need to enter into additional licenses to maintain a consistent level of data usage over time. Users also report an inability to negotiate the terms of access to data feeds and a lack of transparency in price increases.

    ESMA opines that legislative changes are needed to establish the conditions under which the credit ratings of CRAs can be accessed and used for regulatory reporting purposes. The CRA Regulation should be amended either to clarify how the primary distribution of credit ratings and ancillary services by CRAs’ affiliates (described in this Opinion) falls within its scope, or to require the credit ratings published on the websites of CRAs or the European Rating Platform to be accessible in machine-readable format and to be downloadable for use in regulatory reporting. ESMA also highlights that Article 11a of the CRA Regulation has not achieved its stated objective of improving the comparability of credit ratings available in the European Union. In the event that the legislators do not wish to make changes to the European Rating Platform, ESMA requests that the obligation for ESMA to maintain the European Rating Platform should be removed. ESMA notes that the concerns raised in this Opinion regarding the distribution of credit ratings to subscribers could also be addressed by the adoption of an alternative regulation at the European Union level; for example, this could require credit ratings to be published on the European Single Access Point in a format that allows the ratings to be accessed and used for regulatory reporting purposes.


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    Keywords: Europe, EU, Banking, Securities, Credit Ratings, CRA Regulation, Credit Rating Agencies, European Rating Platform, ERP, Opinion, CRA, Reporting, ESMA

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