May 27, 2019

ESMA registered Inbonis SA as a Credit Rating Agency (CRA) under the CRA Regulation, with effect from May 27, 2019. The company is based in Madrid, Spain, and intends to issue corporate ratings on corporate issuers that are not considered as a financial institution or insurance undertaking.

The CRA Regulation seeks to ensure that credit ratings issued in EU meet minimum standards of quality, transparency, and independence by providing that only companies registered by ESMA as CRAs may lawfully issue credit ratings. These credit ratings can be used for regulatory purposes by credit institutions, investment firms, insurance, and reinsurance undertakings, institutions for occupational retirement provision, management companies, investment companies, alternative investment fund managers, and central counterparties. To be registered as a CRA, a company must be able to demonstrate to ESMA that it complies with the requirements of the CRA Regulation, which covers the:

  • Governance of CRAs and the management of conflicts of interest
  • Development and application of methodologies for assessing credit risk
  • Disclosure of information to ESMA and to market participants

Once registered, CRAs are subject to ongoing monitoring and supervision by ESMA to ensure that they continue to meet the conditions for registration. ESMA can also impose sanctions where it finds that a CRA has failed to meet its obligations under the CRA Regulation. The total number of CRAs registered in the EU is 29. Among the 29 registered CRAs, four operate under a group structure, totaling 19 legal entities in EU, which means that the total number of CRA entities registered in EU is 44.

 

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Keywords: Europe, EU, Spain, Banking, Securities, CRA, CRA Regulation, Inbonis SA, ESMA

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