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This decision allows the use in the EU of credit ratings issued in third countries while the convergence process with the EU requirements and the endorsement process of third countries continue. At the same time, following a careful assessment of its regulatory framework, ESMA has decided to endorse Australia’s regulatory regime on credit ratings (according to Art 4 (3) of the EU Regulation on Credit Rating Agencies, or CRAs).
Steven Maijoor, ESMA Chair, said: “ESMA is working actively to assess the regulatory framework for credit rating agencies of several non-EU countries. The extension of the transitional period until 30 April 2012 will allow us to complete the assessment of the countries from which the overwhelming majority of third-country ratings are issued. The assessment requires that the regulatory framework in the third country is "as stringent as" the European CRA Regulation. Today, we have also added Australia to the list of countries which are already assessed as endorsable."
First regulatory technical standards on CRAs adopted
On 20 December 2011, ESMA adopted its first four draft Regulatory Technical Standards (RTS) on Credit Rating Agencies (CRAs). In accordance with the CRA Regulation, these four RTS were sent for endorsement to the European Commission. They will be directly applicable in all Member States upon the date of endorsement. The four RTS contribute to the establishment of harmonised standards in financial services, to ensure a level playing field and adequate protection for investors and consumers across the European Union.
The new draft standards complement the CRA Regulation by introducing detailed specifications for CRAs for the information they have to provide to ESMA at the moment of registration, certification, and during their periodic data reporting. Such information will be used by ESMA for its ongoing supervision. In addition, the RTS detail the information that will be used for the disclosure on the past performance of credit rating, provided to the public through ESMA's central repository (CEREP) which will be made publically available in January 2012. Finally, the RTS provide detailed specifications on the compliance of credit rating methodologies with the CRA Regulation.