FMA Executive Directors Helmut Ettl and Kurt Pribil have welcomed the fact that, with the publication of the EU Regulation on Credit Rating Agencies (EC, No. 1060/2009), the first legal step has been taken towards the Europe-wide supervision of such agencies: “In the form of compulsory registration, ongoing supervision as well as a certification and recognition scheme, an important foundation has been laid for efficient and effective supervision in an area that is so important to the financial markets.” Austria has until 7 June 2010 to appoint a competent authority and to meet the legal and de facto conditions required for application of this Regulation.
Under the Regulation, all credit rating agencies that are based in or have a branch in the EU require a licence. Only then can credit institutions, insurance undertakings and investment firms apply their ratings for regulatory purposes. The tasks of issuing licences and ongoing supervision will fall to the competent supervisory authority in the country in which the agency is based. However, through colleges, all of the authorities in those countries in which the agency’s ratings are applied will also be involved. During the licensing process, in the absence of a unanimous decision any member of the college may lodge an objection to the issuing of a licence by the home authority.
Ongoing supervision will not deal with the content of the ratings but will be related to compliance with transparency and organisational requirements. Not only the home authority may implement supervisory measures. These may also be introduced by any of the other authorities affected by the agency’s ratings.
Credit ratings issued in third countries (non-EEA) are to be converted into European ratings by means of an endorsement regime. In this regard the Regulation sets out strict conditions, and stipulates that responsibility for the foreign rating being converted into a European rating should lie with a credit rating agency that is licensed in the EU. As part of a second procedure, a third-country rating agency may also be certified, but only in cases where this has no systemic significance for the financial market stability or integrity of an EU Member State’s financial market. The first licensing procedures are due to begin in June 2010 and will be coordinated through the Committee of European Securities Regulators in the college system. A dedicated European supervisory institution is then due to be set up with effect from 2011.
For further information please contact
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)1/24959-5106
+43/(0676)/882 49 516