CESR urges the Commission to form in very short term an international CRAs standard setting and monitoring body. In case of lacking support or failure supervisory authorities should step in.
CESR urges the Commission to form in very short term an international CRAs standard setting and monitoring body composed of senior representatives of the investor, issuer and investment firms’ communities.
CRAs should also be part of the body when acting in its standard setting capacity but not when performing its monitoring activity. If international regulatory involvement cannot be achieved in the short term, CESR recommends that this body is formed at an EU level.
In case of lacking support or failure supervisory authorities should step in to ensure, probably through regulation, the integrity and quality of the rating process.
“The events of last year surely merit a thorough re-evaluation of the current self-regulatory regime”, Ingrid Bonde, the Chair of the CESR task force on CRA said.
The report also contains a summary of the main initiatives in the international market in relation to the role CRAs in the structured finance sector and CESR’s proposals to enhance the integrity and quality of the rating process
To increase transparency CESR recommends that CRAs publish more details on structured finance products. Where possible, this information should be provided in a standardised and in a publicly available format.
On the Conflicts of Interest CESR calls for a clearer international consensus over acceptable interaction between CRAs and issuers and stresses the need to disclose the fees they receive from issuers.
A separate section of the report also provides an analysis of the changes in the CRA’s codes of conduct.
Press release
Report
© CESR - Committee of European Securities Regulators
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