ESMA proposed supplementary guidance on the application of the endorsement regime. This consultation follows on from the updated guidelines on endorsement, which were published in November 2017, and comes in response to requests from the industry. ESMA proposes to add the supplementary guidance as an additional subsection of its updated guidelines on endorsement, which will apply to credit ratings issued after January 01, 2019 or reviewed after that date. The consultation will close on May 25, 2018.
The supplementary guidance proposed in this consultation paper aims to provide clarity about the general principle ESMA relies on when assessing whether an alternative internal requirement can be considered as stringent as a requirement set out in Credit Rating Agency Regulation (CRAR). Furthermore, the proposed guidance intends to provide transparency and certainty about areas in which third-country Credit Rating Agencies (CRAs) are not already fulfilling the EU requirements.
In the updated guidelines on endorsement which ESMA published in November 2017, 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 CRAR. 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 CRAR 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 CRAR.
- Press Release
- Draft Guidelines on Supplementary Guidance (PDF)
- Final Report on Endorsement Regime Guidelines (PDF)
Comment Due Date: May 25, 2018
Keywords: Europe, EU, Securities, Supplementary Guidance, Endorsement Regime, CRA Regulation, ESMA
Previous ArticleCPMI-IOSCO Publish Framework for Supervisory Stress Testing of CCPs
MAS and Temasek jointly released a report to mark the successful conclusion of the fifth and final phase of Project Ubin, which focused on building a blockchain-based multi-currency payments network prototype.
EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.
APRA updated the lists of the Direct to APRA (D2A) validation rules for authorized deposit-taking institutions, insurers, and superannuation entities.
PRA updated the statement that provides guidance to regulated firms on implementation of the EBA guidelines on reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis.
EBA updated the 2019 list of closely correlated currencies that was originally published in December 2013.
FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).
APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.
BCBS and FSB published a report on supervisory issues associated with benchmark transition.
IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.
ESMA updated the reporting manual on the European Single Electronic Format (ESEF).