About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

ESMA Issues Call For Evidence About Credit Ratings Agency Registration Requirements, Technical Standards Incoming

Subscribe to our newsletter

Following on from its predecessor’s work last year, the European Securities and Markets Authority (ESMA) is reaching out to credit ratings agencies and the users of ratings to provide feedback on its proposals for endorsement guidelines, which will form the basis for technical standards that will need to be adopted by 7 June this year. To this end, this month it published a call for evidence on the proposed regime under which data from ratings agencies will be endorsed for use. Firms must provide feedback on the subject by 24 January.

Back in 2009, the Committee of European Securities Regulators (CESR) was charged with setting in place a new reporting regime for ratings agencies to provide information on the historical performance of their credit ratings issued to the regulator, which would then be published in a central repository. ESMA will, from 1 July this year, assume responsibility for the supervision of the European ratings agencies and these firms will therefore need to register with the new European level regulator in order to conduct business in the region and for their ratings to be used for regulatory purposes.

Due to the wide scale revisions to the monitoring of these agencies, ESMA is therefore also re-examining the initial guidelines on endorsement and aiming to provide further clarification where necessary. The responses received will then feed into a consultation paper on the future guidelines and ratings firms may face new technical standards that they must meet in order to receive the regulator’s endorsement. The consultation paper also details the transition period before the introduction of the new requirements, during which firms must begin to adopt these new standards.

As part of the endeavour, ESMA is seeking input into its cost-benefit analysis regarding the introduction of these new standards. The paper notes that the new requirements will have a bigger impact in some jurisdictions than others: “ESMA assumes that the regulatory frameworks in a number of jurisdictions would not pass the ‘as stringent as’ test required by the current CESR Guidelines. As a consequence, ratings issued in those countries would no longer be able to be used for regulatory purposes after 7 June 2011, until such time as the frameworks in question change.”

The regulator is seeking to find out how many non-EU ratings are being used by firms on a regular basis and how this data feeds into firms’ capital requirements calculations. All responses to these proposals should be submitted online via ESMA’s website under the section “ESMA Work” heading “Consultation” here. http://www.esma.europa.eu

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: End-to-End Lineage for Financial Services: The Missing Link for Both Compliance and AI Readiness

The importance of complete robust end-to-end data lineage in financial services and capital markets cannot be overstated. Without the ability to trace and verify data across its lifecycle, many critical workflows – from trade reconciliation to risk management – cannot be executed effectively. At the top of the list is regulatory compliance. Regulators demand a...

BLOG

Modern Data Platforms Empower Critical Use Cases: Webinar Preview

No longer is it enough for financial institutions to be simply “on top” of their data management architecture. They need to be constantly looking for the next innovation to keep them ahead of the game in this fast-moving space. That’s why modern data management platforms are the focus of so many organisations at the moment....

EVENT

Data Management Summit New York City

Now in its 15th year the Data Management Summit NYC brings together the North American data management community to explore how data strategy is evolving to drive business outcomes and speed to market in changing times.

GUIDE

The DORA Implementation Playbook: A Practitioner’s Guide to Demonstrating Resilience Beyond the Deadline

The Digital Operational Resilience Act (DORA) has fundamentally reshaped the European Union’s financial regulatory landscape, with its full application beginning on January 17, 2025. This regulation goes beyond traditional risk management, explicitly acknowledging that digital incidents can threaten the stability of the entire financial system. As the deadline has passed, the focus is now shifting...