Featured Product

    ESMA on Endorsement of UK Credit Ratings in Case of No-Deal Brexit

    March 15, 2019

    ESMA has set out the implications of Brexit for credit rating agencies (CRAs) based in UK, including the endorsement of UK credit ratings, in case of a no-deal Brexit. In a no-deal Brexit scenario, UK-based CRAs will no longer meet the conditions for registration and their registrations will be withdrawn changing their status to third-country CRAs. In this event, the outstanding credit ratings of UK-based CRAs will only continue to be usable for regulatory purposes in EU if the credit ratings are endorsed by a CRA that is located in an EU member state (EU27 CRA).

    Most UK-based CRAs have taken the necessary steps to prepare for the endorsement regime. An EU27 CRA must notify ESMA of its intention to endorse credit ratings from the UK-based CRA. ESMA supervises seven UK-based CRAs—AM Best Europe-Rating Services Ltd, DBRS Ratings Limited, Fitch Ratings Limited, Fitch Ratings CIS Limited, Moody’s Investors Service Ltd, Moody’s Investors Service EMEA Ltd, and The Economist Intelligence Unit Ltd. As of March 15, 2019, all UK-based CRAs, except The Economist Intelligence Unit Ltd, have taken steps to ensure that an EU27 CRA is willing and able to endorse its credit ratings in a no-deal Brexit scenario.

    For a credit rating issued by a third-country CRA to be endorsed by an EU27 CRA, the CRA Regulation requires a set of strict conditions to be met. Some of these conditions relate to the legal and supervisory framework in the third country while other conditions relate to the EU27 and third-country CRAs that wish to make use of the endorsement regime. ESMA has completed an assessment of the legal and supervisory framework for CRAs foreseen by the UK statutory instrument 226 of February 13, 2019, which will take effect on the date of Brexit, in a no-deal Brexit scenario. It is also a condition for endorsement that ESMA has a cooperation agreement with the supervisory authority of the UK. This condition is met by the memorandum of understanding that was agreed on February 01, 2019 and will take effect on the date of Brexit, in a no-deal Brexit scenario. 

     

    Related Links

    Keywords: Europe, EU, UK, Banking, Securities, Brexit, No-Deal Brexit, CRA Regulation, EU27 CRA, UK-Based CRA, CRA, ESMA

    Related Articles
    News

    EIOPA Report Analyzes Use and Impact of Long-Term Guarantee Measures

    EIOPA submitted—to the European Parliament, the Council of the European Union, and EC—its 2020, fifth, and last annual report on long-term guarantee measures and measures on equity risk.

    December 03, 2020 WebPage Regulatory News
    News

    BIS, SNB, and SIX Announce Successful Completion of CBDC POC

    The BIS Innovation Hub Swiss Centre, SNB, and the financial infrastructure operator SIX announced the successful completion of a joint proof-of-concept (PoC) experiment as part of the Project Helvetia.

    December 03, 2020 WebPage Regulatory News
    News

    EBA Sets Out Treatment of Certain Banking Book Positions Under FRTB

    EBA published the final draft regulatory technical standards for calculation of own funds requirements for market risk, under the standardized and internal model approaches of the Fundamental Review of the Trading Book (FRTB) framework.

    December 03, 2020 WebPage Regulatory News
    News

    EIOPA Consults on Integrating Climate Change into SII Standard Formula

    EIOPA published discussion paper on a methodology for the potential inclusion of climate change in the Solvency II (sometimes also written as SII) standard formula when calculating natural catastrophe underwriting risk.

    December 02, 2020 WebPage Regulatory News
    News

    EU Issues Corrigenda to Investment Firms Directive and Regulation

    EU published, in the Official Journal of the European Union, corrigenda to the Directive and the Regulation on the prudential requirements and supervision of investment firms.

    December 02, 2020 WebPage Regulatory News
    News

    MAS Proposes Changes to Rules Arising from Banking Amendment Act

    MAS proposed amendments to certain regulations, notices, and guidelines arising from the Banking (Amendment) Act 2020.

    December 02, 2020 WebPage Regulatory News
    News

    PRA to Elaborate on Approach to Transposition of CRD5 by Mid-December

    PRA published a statement that explains when to expect further information on the PRA approach to transposing the Capital Requirements Directive (CRD5), including its approach to revisions to the definition of capital for Pillar 2A.

    November 30, 2020 WebPage Regulatory News
    News

    RBNZ Consults on Aspects of Insurance Act, Solvency Standards & IFRS17

    RBNZ launched consultations on the scope of the Insurance Prudential Supervision Act (IPSA) 2010 and on the associated Insurance Solvency Standards.

    November 30, 2020 WebPage Regulatory News
    News

    SRB Sets Out Work Program for 2021-2023

    SRB published the work program for 2021-2023, setting out a roadmap to further operationalize the Single Resolution Fund and to achieve robust resolvability of banks under its remit over the next three years.

    November 30, 2020 WebPage Regulatory News
    News

    EIOPA Consults on KPIs on Sustainability for Non-Financial Reporting

    EIOPA is consulting on the relevant ratios to be mandatorily disclosed by insurers and reinsurers falling within the scope of the Non-Financial Reporting Directive as well as on the methodologies to build these ratios.

    November 30, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 6191