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12.10.2012 Official
Journal
of
the
European
Union L
278/17
DECISIONS
COMMISSION IMPLEMENTING DECISION
of 5 October 2012
on the recognition of the legal and supervisory framework of Canada as equivalent to the
requirements of Regulation (EC) No 1060/2009 of the European Parliament and of the Council
on credit rating agencies
(Text with EEA relevance)
(2012/630/EU)
THE EUROPEAN COMMISSION,
(3) Pursuant
to
the
second
subparagraph
of
Article
5(6)
of
Regulation (EC) No 1060/2009, the fulfilment of three
conditions needs to be assessed in order to consider a
third country legal and supervisory framework equivalent
to Regulation (EC) No 1060/2009.
Having regard to the Treaty on the Functioning of the European
Union,
Having regard to Regulation (EC) No 1060/2009 of the
(4) According
to
the
first
condition,
credit
rating
agencies
in
European Parliament and of the Council of 16 September
the third country must be subject to authorisation or
2009 on credit rating agencies ( 1 ), and in particular Article 5(6)
registration and subject to effective supervision and
thereof,
enforcement on an ongoing basis. Canada has a compre
hensive and legally binding framework in relation to
CRAs and the use of credit ratings. National Instrument
25-101 Designated Rating Organizations (DRO) was
introduced on 27 January 2012 and became effective
from 20 April 2012. This framework requires a credit
Whereas:
rating agency to be registered with the Canadian
Securities Administrators (CSA) and provides for
ongoing supervision of the credit rating agency by the
CSA. For the purposes of carrying out its oversight tasks,
the CSA is endowed with a wide and comprehensive
(1) On
12
June
2009
the
Commission
granted
a
mandate
to
range of powers. The CSA has the power to require
the Committee of European Securities Regulators (CESR),
access to books, records and documents kept by credit
whose tasks have been assumed by the European
rating agencies, and to request other relevant
Securities and Markets Authority established on
information, including telephone records and data
1 January 2011 pursuant to Regulation (EU) No
traffic. The CSA is also empowered to conduct on-site
1095/2010 of the European Parliament and of the
inspections and inquire into and examine books and
Council of 24 November 2010 establishing a European
records. Moreover, the CSA may bring proceedings
Supervisory Authority (European Securities and Markets
against a credit rating agency in the event of a breach
Authority) (
of National Instrument 25-101 using any of the powers

2 ) (ESMA), requesting their advice with regard
to the technical assessment of the legal and supervisory
which are available in the event of a breach of securities’
framework of Canada in respect of credit rating agencies.
legislation. Among other powers, the CSA may make an
order revoking the designated status of a DRO, impose a
fine up to 1 000 000 CAD for each failure to comply
with its legal obligations, and require a DRO to rectify
any past non-compliance. All CRAs based in Canada
were registered as DROs by the CSA on 30 April
(2) In
its
advice
delivered
on
18
April
2012,
ESMA
2012 and have since then been subject to the CSA’s
suggested that the Canadian legal and supervisory
ongoing supervision. The Ontario Securities Commission
framework in respect of credit rating agencies be
which acts as lead supervisor within the CSA intends to
considered equivalent to the EU regulatory regime for
conduct on-site inspections at least every two years. The
credit rating agencies.
cooperation agreement concluded between ESMA and
the CSA provides for information exchange with regard
( 1 ) OJ L 302, 17.11.2009, p. 1.
to enforcement and supervisory measures taken against
( 2 ) OJ L 331, 15.12.2010, p. 84.
cross border CRAs.

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L 278/18
EN
Official Journal of the European Union
12.10.2012
(5) According
to
the
second
condition,
credit
rating
agencies
Canadian legal and supervisory framework for credit
in the third country must be subject to legally binding
rating agencies should be considered equivalent to the
rules which are equivalent to those set out in Articles 6
legal and supervisory framework established by Regu
to 12 of and Annex I to Regulation (EC) No 1060/2009.
lation (EC) No 1060/2009. The Commission, in
The Canadian legal and supervisory framework meets the
cooperation with ESMA, will continue monitoring the
objectives of Regulation (EC) No 1060/2009 in respect
evolution of the Canadian legal and supervisory
of the management of conflicts of interest, the organisa
framework for credit rating agencies and the fulfilment
tional processes and procedures that a credit rating
of the conditions on the basis of which this decision has
agency needs to have in place, the quality of ratings
been taken.
and of rating methodologies, the disclosure of credit
ratings and the general and periodic disclosure of credit
rating activities. Therefore, the Canadian framework
(8) The
measures
provided
for
in
this
Decision
are
in
provides for equivalent protection in terms of integrity,
accordance with the opinion of the European Securities
transparency, good governance of credit rating agencies
Committee,
and reliability of the credit rating activities.
HAS ADOPTED THIS DECISION:
(6) According
to
the
third
condition,
the
regulatory
regime
Article 1
in the third country must prevent interference by the
supervisory authorities and other public authorities of
For the purposes of Article 5 of Regulation (EC) No
that third country with the content of credit ratings
1060/2009, the Canadian legal and supervisory framework
and methodologies. In this respect, Section B of
for credit rating agencies shall be considered as equivalent to
Appendix A to National Instrument 25-101 requires
the requirements of Regulation (EC) No 1060/2009.
credit rating agencies to establish a committee
responsible for implementing a rigorous and formal
Article 2
process for issuing and reviewing the methodologies,
models and key rating assumptions they use. Neither
This Decision shall enter into force on the twentieth day
the CSA nor any other public authority is empowered
following that of its publication in the Official Journal of the
to interfere in this process or with the content of credit
European Union.
ratings, or rating methodologies.
Done at Brussels, 5 October 2012.
(7)
In view of the factors examined, the conditions laid
down in the second subparagraph of Article 5(6) of
For the Commission
Regulation (EC) No 1060/2009 can be considered to
be met by the Canadian legal and supervisory
The President
framework for credit rating agencies. Therefore, the
José Manuel BARROSO

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