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31.5.2013 Official
Journal
of
the
European
Union L
146/1
I
(Legislative acts)
REGULATIONS
REGULATION (EU) No 462/2013 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 21 May 2013
amending Regulation (EC) No 1060/2009 on credit rating agencies
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
and supervise credit rating agencies. This Regulation
EUROPEAN UNION,
complements the current regulatory framework for
credit rating agencies. Some of the most important
issues, such as conflicts of interest due to the issuer-
Having regard to the Treaty on the Functioning of the European
pays model and disclosure for structured finance instru
Union, and in particular Article 114 thereof,
ments, have been addressed and the framework will need
to be reviewed after having been in place for a reasonable
period of time to assess whether it fully resolves those
Having regard to the proposal from the European Commission,
issues. Meanwhile the need to review transparency,
procedural requirements and the timing of publication
specifically for sovereign ratings was highlighted by the
After transmission of the draft legislative act to the national
current sovereign debt crisis.
parliaments,
Having regard to the opinion of the European Central Bank ( 1 ),
(2) The
European
Parliament’s
resolution
of
8
June
2011
on
credit rating agencies: future perspectives ( 7 ), called for
Having regard to the opinion of the European Economic and
enhanced regulation of credit rating agencies. At its
Social Committee (
informal meeting of 30 September and 1 October

2 ),
2010, the Ecofin Council acknowledged that further
efforts should be made to address a number of issues
Acting in accordance with the ordinary legislative procedure (
related to credit rating activities, including the risk of

3 ),
over-reliance on credit ratings and the risk of conflicts
of interest stemming from the remuneration model of
Whereas:
credit rating agencies. The European Council of
23 October 2011 concluded that progress is needed on
reducing over-reliance on credit ratings.
(1) Regulation
(EC)
No
1060/2009
of
the
European
Parliament and of the Council ( 4 ) requires credit rating
agencies to comply with rules of conduct in order to
mitigate possible conflicts of interest, and to ensure
(3) At
the
international
level,
the
Financial
Stability
Board
high quality and sufficient transparency of credit ratings
(FSB), of which the European Central Bank (ECB) is a
and the rating process. Following the amendments
member institution, endorsed on 20 October 2010 prin
introduced by Regulation (EU) No 513/2011 of the
ciples to reduce the reliance of authorities and of
European Parliament and of the Council
( 5 ), the
financial institutions on credit ratings (‘the FSB prin
European Supervisory Authority (European Securities
ciples’). The FSB principles were endorsed by the G20
and Markets Authority) (ESMA), established by Regu
Seoul Summit in November 2010. It is therefore appro
lation (EU) No 1095/2010 of the European Parliament
priate that the sectoral competent authorities assess
and of the Council ( 6 ), has been empowered to register
market participants’ practices and encourage those
market participants to mitigate the impact of such prac
tices. The sectoral competent authorities should decide
( 1 ) OJ C 167, 13.6.2012, p. 2.
( 2 ) OJ C 181, 21.6.2012, p. 68.
upon the measures for encouragement. ESMA, where
( 3 ) Position of the European Parliament of 16 January 2013 (not yet
appropriate in cooperation with the European Super
published in the Official Journal) and decision of the Council of
visory Authority (European Banking Authority), estab
13 May 2013.
lished by Regulation (EU) No 1093/2010 of the
( 4 ) OJ L 302, 17.11.2009, p. 1.
( 5 ) OJ L 145, 31.5.2011, p. 30.
( 6 ) OJ L 331, 15.12.2010, p. 84.
( 7 ) OJ C 380 E, 11.12.2012, p. 24.

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Official Journal of the European Union
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European Parliament and of the Council ( 1 ), and with the
(7) The
relevance
of
rating
outlooks
for
investors
and
issuers
European Supervisory Authority (European Insurance and
and their effects on markets are comparable to the
Occupational Pensions Authority), established by Regu
relevance and effects of credit ratings. Therefore, all the
lation (EU) No 1094/2010 of the European Parliament
requirements of Regulation (EC) No 1060/2009 which
and of the Council ( 2 ), should take action to facilitate
aim at ensuring that rating actions are accurate, trans
convergence of supervisory practices in accordance with
parent and free from conflicts of interest should also
Regulation (EU) No 1095/2010, and within the
apply to rating outlooks. According to current super
framework of this Regulation.
visory practice, a number of requirements of that Regu
lation apply to rating outlooks. This Regulation should
clarify the rules and provide legal certainty by intro
ducing a definition of rating outlooks and clarifying
which specific provisions apply to such rating outlooks.
The definition of rating outlooks should also encompass
opinions regarding the likely direction of a credit rating
(4) Credit
rating
agencies
should
make
investors
aware
of
the
in the short term, commonly referred to as credit
data on the probability of default of credit ratings and
watches.
rating outlooks based on historical performance, as
published on the central repository created by ESMA.
(8) In
the
medium
term,
further
action
should
be
evaluated
to delete references to credit ratings for regulatory
(5) Pursuant
to
the
FSB
principles,
‘central
banks
should
purposes from financial regulation and to eliminate the
reach their own credit judgments on the financial
risk-weighting of assets by means of credit ratings.
instruments that they will accept in market operations,
However, for the time being, credit rating agencies are
both as collateral and as outright purchases. Central bank
important participants in the financial markets. As a
policies should avoid mechanistic approaches that could
consequence, the independence and integrity of credit
lead to unnecessarily abrupt and large changes in the
rating agencies and their credit rating activities are of
eligibility of financial instruments and the level of
particular importance in guaranteeing their credibility
haircuts that may exacerbate cliff effects’. Furthermore,
vis-à-vis market participants, in particular investors and
the ECB stated in its opinion of 2 April 2012 that it is
other users of credit ratings. Regulation (EC) No
committed to supporting the common objective of
1060/2009 provides that credit rating agencies are to
reducing over-reliance on credit ratings. In that respect,
be registered and supervised as their services have
the ECB reports regularly on the various measures taken
considerable impact on the public interest. Credit
by the Eurosystem to reduce reliance on credit ratings.
ratings, unlike investment research, are not mere
Pursuant to Article 284(3) of the Treaty on the Func
opinions about a value or a price for a financial
tioning of the European Union (TFEU), the ECB is to
instrument or a financial obligation. Credit rating
address an annual report on the activities of the
agencies are not mere financial analysts or investment
European System of Central Banks (ESCB) and on the
advisors. Credit ratings have regulatory value for
monetary policy of both the previous and current years
regulated investors, such as credit institutions, insurance
to the European Parliament, the Council and the
companies and other institutional investors. Although the
Commission, and also to the European Council. The
incentives to rely excessively on credit ratings are being
President of the ECB is to present that report to the
reduced, credit ratings still drive investment choices, in
European Parliament, which may hold a general debate
particular because of information asymmetries and for
on that basis, and to the Council. Further, the ECB could,
efficiency purposes. In that context, credit rating
in such reports, describe how it has implemented the FSB
agencies must be independent and must be perceived
principles and the alternative assessment mechanisms it
as such by market participants, and their rating
uses.
methods must be transparent and be perceived as such.
(6) The
Union
is
working
towards
reviewing,
at
a
first
stage, (9) Over-reliance
on
credit
ratings
should
be
reduced
and
all
whether any references to credit ratings in Union law
the automatic effects deriving from credit ratings should
trigger or have the potential to trigger sole or mech
be gradually eliminated. Credit institutions and
anistic reliance on such credit ratings and, at a second
investment firms should be encouraged to put in place
stage, all references to credit ratings for regulatory
internal procedures in order to make their own credit
purposes with a view to deleting them by 2020,
risk assessment and should encourage investors to
provided that appropriate alternatives to credit risk
perform a due diligence exercise. Within that framework,
assessment are identified and implemented.
this Regulation provides that financial institutions should
not solely or mechanistically rely on credit ratings.
( 1 ) OJ L 331, 15.12.2010, p. 12.
Therefore, those institutions should avoid entering into
( 2 ) OJ L 331, 15.12.2010, p. 48.
contracts where they solely or mechanistically rely on

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Union L
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credit ratings and should avoid using them in contracts
credit rating agency may become too sympathetic to the
as the only parameter to assess the creditworthiness of
desires of the rated entity. In those circumstances, the
investments or to decide whether to invest or divest.
impartiality of credit rating agencies could, over time,
become questionable. Indeed, credit rating agencies
appointed and paid by a corporate issuer have an
incentive to issue overly favourable ratings on that
rated entity or on its debt instruments in order to
maintain the business relationship with such issuer.
Issuers are also subject to incentives that favour long-
lasting relationships, such as the lock-in effect whereby
(10) Regulation
(EC)
No
1060/2009
already
provided
a
first
an issuer refrains from changing credit rating agency as
round of measures to address the question of inde
this could raise concerns of investors regarding the
pendence and integrity of credit rating agencies and
issuer’s creditworthiness. This problem was already
their credit rating activities. The objectives of guaran
identified in Regulation (EC) No 1060/2009, which
teeing the independence of credit rating agencies and
required credit rating agencies to apply a rotation
of identifying, managing and, to the extent possible,
mechanism providing for gradual changes in analytical
avoiding any conflicts of interest that could arise were
teams and credit rating committees so that the inde
already underpinning several provisions of that Regu
pendence of the rating analysts and persons approving
lation. The selection and remuneration of the credit
credit ratings would not be compromised. The success of
rating agency by the rated entity (the issuer-pays
those rules, however, was highly dependent on a behav
model) engenders inherent conflicts of interest. Under
ioural solution internal to the credit rating agency,
that model, there are incentives for credit rating
namely the actual independence and professionalism of
agencies to issue complacency ratings on the issuer in
the employees of the credit rating agency vis-à-vis the
order to secure a long-standing business relationship in
commercial interests of the credit rating agency itself.
order to guarantee revenues or to secure additional work
Those rules were not designed to provide a sufficient
and revenues. Moreover, relationships between the share
guarantee towards third parties that the conflicts of
holders of credit rating agencies and the rated entities
interest arising from the long-lasting relationship would
may cause conflicts of interest, which are not sufficiently
effectively be mitigated or avoided. A way to achieve this
dealt with by the existing rules. As a result, credit ratings
could be by limiting the period during which a credit
issued under the issuer-pays model may be perceived as
rating agency can continuously provide credit ratings on
the credit ratings that suit the issuer rather than the
the same issuer or its debt instruments. Setting out a
credit ratings needed by the investor. It is essential to
maximum duration of the contractual relationship
reinforce the conditions of independence applying to
between the issuer which is rated or which issued the
credit rating agencies in order to increase the level of
rated debt instruments and the credit rating agency
credibility of credit ratings issued under the issuer-pays
should remove the incentive for issuing favourable
model.
credit ratings with respect to that issuer. Additionally,
requiring the rotation of credit rating agencies as a
normal and regular market practice should also effec
tively mitigate the problem of the lock-in effect. Finally,
the rotation of credit rating agencies should have positive
effects on the credit rating market, as it would facilitate
new market entries and offer existing credit rating
agencies the opportunity to extend their business to
(11) In
order
to
increase
competition
in
a
market
that
has
new areas.
been dominated by three credit rating agencies,
measures should be taken to encourage the use of
smaller credit rating agencies. It has been the practice
in recent times for issuers or related third parties to
seek credit ratings from two or more credit rating
agencies, and therefore, where two or more credit
ratings are sought, the issuer or a related third party
should consider appointing at least one credit rating
(13) It
is,
however,
important
that
the
implementation
of
a
agency which does not have more than 10 % of the
rotation mechanism is designed in such a way that the
total market share and which could be evaluated by
benefits of the mechanism more than outweigh its
the issuer or a related third party as capable of rating
possible negative consequences. For example, frequent
the relevant issuance or entity.
rotation could result in increased costs for issuers and
credit rating agencies because the cost associated with
rating a new entity or financial instrument is typically
higher than the cost of monitoring a credit rating that
has already been issued. It also takes a considerable
amount of time and resources to get established as a
credit rating agency, whether as a niche player or
covering all asset classes. Further, ongoing rotation of
(12) The
credit
rating
market
shows
that,
traditionally,
credit
credit rating agencies could have a significant impact
rating agencies and rated entities enter into long-lasting
on the quality and continuity of credit ratings. Equally
relationships. This raises the risk of familiarity, as the
important, a rotation mechanism should be implemented

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Official Journal of the European Union
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with sufficient safeguards to allow the market to adapt
credit ratings and ultimately improve the assessment of
gradually before possibly enhancing the mechanism in
the creditworthiness of re-securitisations. For such
the future. This could be achieved by limiting the
diversity to play a role and to avoid complacency of
scope of the mechanism to re-securitisations, which is
both originators and credit rating agencies, the
a limited source of bank funding, while allowing credit
maximum period during which the credit rating agency
ratings that are already issued to continue to be
is allowed to rate re-securitisations from the same orig
monitored upon request even after rotation becomes
inator must be restricted to a level that guarantees regular
mandatory. Thus, as a general rule, rotation should
fresh assessments of creditworthiness. Those factors,
only affect new re-securitisations with underlying assets
together with the need to provide certain continuity of
from the same originator. The Commission should
approach to credit ratings, mean that a period of four
review whether it is appropriate to maintain a limited
years is appropriate. Where at least four credit rating
rotation mechanism or to apply it to other asset classes
agencies are appointed, the objectives for a rotation
as well and, if so, whether other classes warrant different
mechanism have already been achieved so the
treatment with respect to, for example, the length of the
requirement to rotate should not apply. In order to
maximum duration of the contractual relationship. If the
ensure real competition, such an exemption should
rotation mechanism is established for other asset classes,
only be applicable where at least four of the appointed
the Commission should evaluate whether it is necessary
credit rating agencies rate a certain proportion of the
to introduce an obligation on the credit rating agency to
outstanding financial instruments of the originator.
provide, at the end of the maximum duration period of
the contractual relationship, information on the issuer
and on the rated financial instruments (a handover file),
to the incoming credit rating agency.
(16) It
is
appropriate
to
structure
a
rotation
mechanism
for
re-securitisations around the originator. Re-securitisations
are issued out of special-purpose vehicles without any
significant capacity to service the debt. Therefore, struc
(14) It
is
appropriate
to
introduce
rotation
on
the
credit
rating
turing rotation around the issuer would render the
market for re-securitisations. First, that is the segment of
mechanism ineffective. Conversely, structuring rotation
the European securitisations market that has underper
around the sponsor would mean that the exemption
formed since the financial crisis, and it is therefore the
would almost always apply.
one in which the need to address conflicts of interest is
greatest. Second, while the credit risk on debt
instruments issued by, for instance, corporates to a
high degree depends on the debt servicing capacity of
the issuer itself, the credit risk on re-securitisations is
generally unique to each transaction. Therefore, when a
re-securitisation is created the risk of knowledge being
lost by hiring a new credit rating agency is not high. In
other words, although there is currently only a limited
number of credit rating agencies active in the credit
(17) A
rotation
mechanism
could
be
an
important
tool
for
rating market for re-securitisations, that market is
lowering the barriers to entry to the credit rating market
more naturally open to competition and a rotation
for re-securitisations. At the same time, however, it could
mechanism could be a driver for creating more
make it more difficult for new market players to secure a
dynamics in that market. Finally, the credit rating
foothold in the market because they would not be
market for re-securitisations is dominated by a few
allowed to hold on to their clients. It is therefore appro
large credit rating agencies but there are other players
priate to introduce an exemption from the rotation
who have been building up expertise in this area.
mechanism for small credit rating agencies.
(15) Regular rotation of credit rating agencies issuing credit
(18) In
order
to
be
effective,
the
rotation
mechanism
needs
to
ratings on re-securitisations should bring more diversity
be enforced in a credible manner. The rotation
to the assessment of creditworthiness. Multiple and
requirement would not achieve its objectives if the
different views, perspectives and methodologies applied
outgoing credit rating agency were allowed to rate re-
by credit rating agencies should produce more diverse
securitisations from the same originator again within too

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short a period. Therefore, it is important to provide for
(20) The
independence
of
a
credit
rating
agency
vis-à-vis
a
an appropriate period within which the outgoing credit
rated entity is also affected by possible conflicts of
rating agency cannot be appointed to rate re-securiti
interest of any of its significant shareholders with the
sations from the same originator again. That period
rated entity. A shareholder of a credit rating agency
should be sufficiently long to allow the incoming credit
could be a member of the administrative or supervisory
rating agency to provide its credit rating services effec
board of a rated entity or a related third party. Regu
tively, to ensure that the re-securitisations are truly
lation (EC) No 1060/2009 addresses this type of
exposed to a new scrutiny under a different approach,
situation only as regards the conflicts of interest caused
and to guarantee that the credit ratings issued by the new
by rating analysts, persons approving the credit ratings or
credit rating agency provide enough continuity. At the
other employees of the credit rating agency. That Regu
same time, for a rotation mechanism to function
lation is, however, silent as regards potential conflicts of
properly, the length of the period is constrained by the
interest caused by shareholders or members of credit
supply of credit rating agencies with sufficient expertise
rating agencies. With a view to enhancing the perception
in the area of re-securitisations. Therefore, the length of
of independence of credit rating agencies vis-à-vis the
the period should be proportionate, should generally be
rated entities, it is appropriate to extend the existing
equal to the length of the expired contract of the
rules set out in that Regulation on conflicts of interest
outgoing credit rating agency but should not exceed
caused by employees of the credit rating agencies to
four years.
those caused by shareholders or members holding a
significant position within the credit rating agency.
Hence, the credit rating agency should abstain from
issuing credit ratings, or should disclose that the credit
rating may be affected, where a shareholder or member
holding 10 % of the voting rights of that agency is also a
member of the administrative or supervisory board of the
rated entity or has invested in the rated entity when the
investment reaches a certain size. Furthermore, the fact
that a shareholder or member holding at least 5 % of the
voting rights of that credit rating agency has invested in
(19) Requiring
a
regular
rotation
of
credit
rating
agencies
is
proportionate to the objective pursued. The requirement
the rated entity or is a member of the administrative or
only applies to registered credit rating agencies, which are
supervisory board of the rated entity should be disclosed
regulated and which provide a service affecting the public
to the public, at least if the investment reaches a certain
interest (credit ratings that can be used for regulatory
size. Moreover, where a shareholder or member is in a
purposes) under the issuer-pays model and for a
position to exercise significant influence on the business
particular asset class (re-securitisations). The privilege of
activity of the credit rating agency, that person should
having its services recognised as playing an important
not provide consultancy or advisory services to the rated
role in the regulation of the financial services market
entity or a related third party regarding its corporate or
and being approved to carry out this function, gives
legal structure, assets, liabilities or activities.
rise to the need to respect certain obligations in order
to guarantee independence and the perception of inde
pendence in all circumstances. A credit rating agency
which is prevented from rating re-securitisations from a
particular originator would still be allowed to rate re-
securitisations from other originators as well as rating
other asset classes. In a market context where the
rotation rule applies to all participants, business oppor
tunities will arise since all credit rating agencies would
need to rotate. Moreover, credit rating agencies can
always issue unsolicited credit ratings on re-securiti
sations from the same originator capitalising on their
experience. Unsolicited credit ratings are not constrained
(21) In
order
to
ensure
a
workable
application
of
the
rules
on
by the issuer-pays model and therefore are theoretically
independence and prevention of conflicts of interest set
less affected by potential conflicts of interest. For the
out in Regulation (EC) No 1060/2009 and to prevent
clients of credit rating agencies, the maximum duration
them from becoming ineffective, there is a need for a
of the contractual relationship with a credit rating agency
sufficiently high number of credit rating agencies, uncon
and the requirement to employ more than one credit
nected with both the outgoing credit rating agency in
rating agency also represent restrictions on their
case of rotation and the credit rating agency providing
freedom to conduct their own business. However, those
credit rating services in parallel to the same issuer. It is
restrictions are necessary on public-interest grounds
appropriate to require a strict separation of the outgoing
considering the interference by the issuer-pays model
agency from the incoming credit rating agency in the
with the necessary independence of credit rating
case of rotation as well as of the two credit rating
agencies to guarantee independent credit ratings that
agencies providing credit rating services in parallel to
can be used by investors for regulatory purposes. At
the same issuer. The credit rating agencies concerned
the same time, those restrictions do not go beyond
should not be linked to each other by control, by
what is necessary and should rather be seen as increasing
being part of the same group of credit rating agencies,
the creditworthiness of re-securitisations towards other
by being a shareholder or a member of or being able to
parties, and ultimately the market.
exercise voting rights in any of the other credit rating

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agencies, or by being able to appoint members of the
company. It is therefore appropriate to use the 5 % level
administrative or supervisory boards of any of the other
for the purposes of restricting the simultaneous
credit rating agencies.
investment in more than one credit rating agency. The
measure cannot be considered to be disproportionate,
given that all registered credit rating agencies in the
Union are non-listed undertakings and, therefore, not
subject to the transparency and procedural rules that
apply to listed companies in the Union in accordance
with Directive 2004/109/EC. Often unlisted undertakings
(22) Credit
rating
agencies
should
establish,
maintain,
enforce
are governed by shareholders’ protocols or agreements
and document an effective internal control structure
and the number of shareholders or members is usually
governing the implementation of policies and procedures
low. Therefore, even a minority position in an unlisted
for the prevention and control of possible conflicts of
credit rating agency could be influential. Nevertheless, in
interest and for ensuring the independence of credit
order to ensure that purely economic investments in
ratings, rating analysts and rating teams regarding share
credit rating agencies are still possible, this limitation to
holders, administrative and management bodies and sales
simultaneous investments in more than one credit rating
and marketing activities. Standard Operating Procedures
agency should not be extended to investments channelled
(SOPs) should be put in place relating to corporate
through collective investment schemes managed by third
governance, organisational matters, and the management
parties independent from the investor and not subject to
of conflicts of interest. SOPs should be periodically
the investor’s influence.
reviewed and monitored to evaluate their effectiveness
and whether they should be updated.
(25) The provisions in this Regulation regarding conflicts of
interest with regard to the shareholder structure should
(23) The
perception
of
independence
of
credit
rating
agencies
not only refer to direct but also to indirect shareholdings
would be particularly affected should the same share
as otherwise those rules could be easily circumvented.
holders or members be investing in different credit
Credit rating agencies should make all efforts to know
rating agencies not belonging to the same group of
their indirect shareholders so that they can avoid any
credit rating agencies, at least if such investment
potential conflicts of interest in this respect.
reaches a certain size that could allow those shareholders
or members to exercise a certain influence on the credit
rating agency’s business. Therefore, in order to ensure the
independence (and the perception of independence) of
credit rating agencies, it is appropriate to provide for
stricter rules regarding the relations between the credit
rating agencies and their shareholders or members. For
(26) The
effectiveness of the rules on independence and
prevention of conflicts of interest which require that
that reason, no person should simultaneously hold a
credit rating agencies not provide credit rating services
participation of 5 % or more in more than one credit
to the same issuer for a long period of time could be
rating agency, unless the credit rating agencies concerned
undermined if credit rating agencies were allowed to
belong to the same group.
become significant shareholders or members of other
credit rating agencies.
(24) The
objective
of ensuring sufficient
independence of
credit rating agencies requires that investors not hold
(27) It
is
important
to
ensure
that
modifications
to
the
rating
simultaneously investments of 5 % or more in more
methodologies do not result in less rigorous methodol
than one credit rating agency. Directive 2004/109/EC
ogies. For that purpose, issuers, investors and other
of the European Parliament and of the Council of
interested parties should have the opportunity to
15 December 2004 on the harmonisation of trans
comment on any intended change to rating methodol
parency requirements in relation to information about
ogies. This will help them to understand the reasons
issuers whose securities are admitted to trading on a
behind new methodologies and for the change in
regulated market
( 1 ) provides that those persons
question. Comments provided by issuers and investors
controlling at least 5 % of the voting rights in a listed
on the draft methodologies may provide valuable input
company disclose that fact to the public, because, inter
for the credit rating agencies in defining the methodol
alia, the investors have an interest in knowing about
ogies. ESMA should also be notified of intended changes.
changes in the voting structure of such a company.
Although Regulation (EC) No 1060/2009 confers on
The 5 % level is therefore considered to be a major
ESMA the power to verify that methodologies used by
holding capable of influencing the voting structure in a
credit rating agencies are rigorous, systematic, continuous
and subject to validation based on historical experience,
( 1 ) OJ L 390, 31.12.2004, p. 38.
including back-testing, that verification process should

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not grant ESMA any power to judge the appropriateness
quality and performance of the underlying assets,
of the proposed methodology or of the credit ratings
investors should be provided with more information on
issued following the application of the methodologies.
the underlying assets. This would reduce investors’
Where appropriate, rating methodologies should take
dependence on credit ratings. Moreover, disclosing
into account financial risks deriving from environmental
relevant information on structured finance instruments
hazards.
is likely to reinforce the competition between credit
rating agencies, because it could lead to an increase in
the number of unsolicited credit ratings. The
Commission should, by January 2016, review and
report on the appropriateness of extending the scope
of that disclosure requirement to other financial
(28) Due
to
the
complexity
of
structured
finance
instruments,
products. For example, there are other financial
credit rating agencies have not always succeeded in
products, such as covered bonds and other secured
ensuring a sufficiently high quality of credit ratings
debt, where the risk to a large extent depends on the
issued on such instruments. This has led to a loss of
characteristics of any underlying collateral and where it
market confidence in this type of credit ratings. In
could be relevant to provide investors with more
order to regain confidence it would be appropriate to
information about the collateral.
require issuers or related third parties to engage at least
two different credit rating agencies for the provision of
credit ratings on structured finance instruments, which
could lead to different and competing assessments. This
could also reduce the over-reliance on a single credit
rating.
(31) Investors,
issuers
and
other
interested
parties
should
have
access to up-to-date rating information on a central
website. A European rating platform should be estab
lished by ESMA and should allow investors to easily
compare all credit ratings that exist with regard to a
specific rated entity. It is important that the European
(29) The proposal for a directive on the access to the activity
rating platform website shows all available credit
of credit institutions and the prudential supervision of
ratings per instrument in order to allow investors to
credit institutions and investment firms and the
consider the whole variety of opinions before taking
proposal for a regulation on prudential requirements
their own investment decision. However, in order not
for credit institutions and investment firms, which are
to undermine the ability of credit rating agencies to
to replace Directive 2006/48/EC of the European
operate under the investor-pays model, such credit
Parliament and of the Council of 14 June 2006
ratings should not be included in the European rating
relating to the taking up and pursuit of the business of
platform. The European rating platform should help
credit institutions ( 1 ) and Directive 2006/49/EC of the
smaller and new credit rating agencies to gain visibility.
European Parliament and of the Council of 14 June
The European rating platform should incorporate ESMA’s
2006 on the capital adequacy of investment firms and
central repository with a view to creating a single
credit institutions ( 2 ), introduce a requirement for credit
platform for all available credit ratings per instrument
institutions and investment firms to assess the credit risk
and for information on historical performance data,
of entities and financial instruments in which they invest
published on the central repository. The European
themselves and not simply to rely in this respect on
Parliament supported the establishment of such
credit ratings. That requirement should be extended to
publication of credit ratings in its resolution on credit
other financial market participants regulated under Union
rating agencies of 8 June 2011.
law, including investment managers. For all financial
market participants, however, that requirement should
be enforced in a proportional manner taking into
account the nature, scale, and complexity of the
participant in question. Member States should not be
entitled to impose or maintain rules that allow stricter
(32) Credit
ratings,
whether
issued
for
regulatory
purposes
or
reliance by those investors on credit ratings.
not, have a significant impact on investment decisions
and on the image and financial attractiveness of issuers.
Hence, credit rating agencies have an important respon
sibility towards investors and issuers in ensuring that
they comply with Regulation (EC) No 1060/2009 so
that their credit ratings are independent, objective and
(30) Furthermore, the ability of investors to make an
of adequate quality. However, investors and issuers are
informed assessment of the creditworthiness of
not always in a position to enforce credit rating agencies’
structured finance instruments would be improved if
responsibility towards them. It can be particularly
investors were provided with sufficient information on
difficult to establish the civil liability of a credit rating
those instruments. For example, as the risk on structured
agency in the absence of a contractual relationship
finance instruments to a large extent depends on the
between a credit rating agency and, for instance, an
investor or an issuer rated on an unsolicited basis.
( 1 ) OJ L 177, 30.6.2006, p. 1.
Issuers can also face difficulties in enforcing credit
( 2 ) OJ L 177, 30.6.2006, p. 201.
rating agencies’ civil liability towards them even when

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L 146/8
EN
Official Journal of the European Union
31.5.2013
they have a contractual relationship with the credit rating
regimes which are more favourable to investors or issuers
agency concerned: for instance, a downgrade of a credit
or which are not based on an infringement of Regulation
rating, decided on the basis of an infringement of Regu
(EC) No 1060/2009. The competent court to decide on a
lation (EC) No 1060/2009 committed intentionally or
claim for civil liability brought by an investor or issuer
with gross negligence, can impact negatively the repu
should be determined by the relevant rules on private
tation and funding costs of an issuer, therefore causing
international law.
this issuer damage even if it is not covered by contractual
liability. Therefore, it is important to provide for an
adequate right of redress for investors who have
reasonably relied on a credit rating issued in breach of
Regulation (EC) No 1060/2009 as well as for issuers who
suffer damage because of a credit rating issued in breach
(36) The
fact
that
institutional
investors
including
investment
of Regulation (EC) No 1060/2009. The investor and
managers are obliged to carry out their own assessment
issuer should be able to hold the credit rating agency
of the creditworthiness of assets should not prevent
liable for damages caused by an infringement of that
courts from finding that an infringement of Regulation
Regulation which had an impact on the rating
(EC) No 1060/2009 by a credit rating agency has caused
outcome. While investors and issuers who have a
damage to an investor for which that credit rating agency
contractual relationship with a credit rating agency may
is liable. While this Regulation will improve the possi
choose to base a claim against that credit rating agency
bilities of investors to make an own risk assessment they
on a breach of contract, the possibility of claiming
will continue to have more limited access to information
damages for an infringement of Regulation (EC) No
than the credit rating agencies themselves. Furthermore,
1060/2009 should be available for all investors and
in particular smaller investors may lack the capability to
issuers, regardless of whether there is a contractual rela
review a credit rating provided by a credit rating agency
tionship between the parties.
critically.
(33) It
should
be
possible
for
credit
rating
agencies
to
be
held
liable if they infringe intentionally or with gross
(37) Member States and ESMA should ensure that any
negligence any obligations imposed on them by Regu
penalties imposed pursuant to Regulation (EC) No
lation (EC) No 1060/2009. This standard of fault is
1060/2009 are publicly disclosed only where such
appropriate because the activity of credit rating involves
public disclosure would be proportionate.
a certain degree of assessment of complex economic
factors and the application of different methodologies
may lead to different rating results, none of which can
be considered as incorrect. Also, it is appropriate to
expose credit rating agencies to potentially unlimited
liability only where they breach Regulation (EC) No
(38) In
order
to
further
mitigate
conflicts
of
interest
and
1060/2009 intentionally or with gross negligence.
facilitate fair competition in the credit rating market, it
is important to ensure that the fees charged by credit
rating agencies to clients are not discriminatory.
Differences in fees charged for the same type of service
should only be justifiable by a difference in the actual
costs in providing this service to different clients.
(34) The investor or issuer claiming damages for an
Moreover, the fees charged for credit rating services to
infringement of Regulation (EC) No 1060/2009 should
a given issuer should not depend on the results or
present accurate and detailed information indicating that
outcome of the work performed or on the provision of
the credit rating agency has committed such an
related (ancillary) services. Furthermore, in order to allow
infringement of that Regulation. This should be
for the effective supervision of those rules, credit rating
assessed by the competent court, taking into
agencies should disclose to ESMA the fees received from
consideration that the investor or issuer may not have
each of their clients and their general pricing policy.
access to information that is purely within the sphere of

the credit rating agency.
(39) In
order
to
contribute
to
the
issuance
of
up-to-date
and
(35) Regarding
matters
concerning
the
civil
liability
of
a
credit
credible sovereign ratings and to facilitate users’ under
rating agency which are not covered by or defined in this
standing, it is important to regularly review those ratings.
Regulation, including causation and the concept of gross
It is also important to increase transparency about the
negligence, such matters should be governed by the
research work carried out, the staff allocated to the prep
applicable national law as determined by the relevant
aration of sovereign ratings and the underlying
rules of private international law. In particular, Member
assumptions behind the credit ratings made by credit
States should be able to maintain national civil liability
rating agencies in relation to sovereign debt.

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EN
31.5.2013 Official
Journal
of
the
European
Union L
146/9
(40) It
is
essential
that
investors
have
appropriate
information
three. Where this is necessary to comply with their legal
to assess the creditworthiness of Member States. In the
obligations, credit rating agencies should be allowed to
framework of its surveillance of economic and fiscal
deviate from their announced calendar, while explaining
policies of Member States, the Commission collects and
in detail the reasons for such deviation. However, such
processes data on the economic, financial and fiscal
deviation should not happen routinely.
situation and performance of all Member States, most
of which are published by the Commission and which
can therefore be used by investors to assess the potential
creditworthiness of Member States. Where appropriate
and available, and subject to the relevant confidentiality
rules applicable in the framework of its surveillance of
economic and fiscal policies of Member States, the
(43) On the basis of the evolution of the market, the
Commission should complement existing reporting on
Commission should submit a report to the European
economic performance of Members States by possible
Parliament and the Council exploring the appropriateness
additional elements or indicators, which may help
of, and ways to, support a European public credit rating
investors to assess the creditworthiness of Member
agency dedicated to assessing the creditworthiness of
States. Those elements should be made available to the
Members States’ sovereign debt and/or a European
public, complementing the existing publications and
credit rating foundation for all other credit ratings. If
other publicly disclosed information, with a view to
necessary, the Commission should submit appropriate
providing investors with further data in order to help
legislative proposals.
them assess the creditworthiness of sovereign entities
and their debt information. Bearing this in mind, the
Commission should examine the possibility of
developing a European creditworthiness assessment, to
allow investors to make an impartial and objective
assessment of Member States’ creditworthiness, taking
into account the specific economic and social devel
opment. If necessary, the Commission should submit
(44) In
view
of
the
specificities
of
sovereign
ratings
and
in
appropriate legislative proposals.
order to avoid a risk of contagion across the Union,
statements announcing a revision of a given group of
countries should be prohibited if not accompanied by
individual country reports. Furthermore with the view
to enhancing the validity and accessibility of sources of
information used by credit rating agencies in public
communications on potential changes in sovereign
(41) The current rules provide for credit ratings to be
ratings, other than credit ratings, rating outlooks and
announced to the rated entity 12 hours before their
accompanying press releases, such communications
publication. In order to avoid such notification taking
should always be based on information within the
place outside working hours and to leave the rated
sphere of the rated entity which has been disclosed
entity sufficient time to verify the correctness of data
with the consent of the rated entity unless that
underlying the credit rating, the rated entity should be
information is available from generally accessible
notified a full working day before publication of the
sources. Where the legal framework governing the
credit rating or of a rating outlook. A list of the
rated entity provides that the rated entity must not
persons entitled to receive such notification should be
disclose such information, such as in the case of inside
limited and should be clearly identified by the rated
information as defined in point (1) of Article 1 of
entity.
Directive 2003/6/EC of the European Parliament and
the Council of 28 January 2003 on insider dealing and
market manipulation (market abuse) ( 1 ), the rated entity
must not give its consent.
(42) In view of the specificities of sovereign ratings and in
order to reduce the risk of volatility, it is appropriate and
proportionate to require credit rating agencies to publish
those ratings only after close of business of the trading
(45) For
the
purpose
of
transparency,
when
publishing
their
venues established in the Union and at least one hour
sovereign ratings, credit rating agencies should explain in
before their opening. On the same basis, it is also appro
their press releases or reports the key elements
priate and proportionate that, at the end of December,
underlying those credit ratings. However, transparency
credit rating agencies should publish a calendar for the
for sovereign ratings should not be conclusive to the
following 12 months setting the dates for the publication
direction of national policies (economic, labour or
of sovereign ratings and, corresponding thereto, the dates
other). Therefore, whilst those policies may serve as an
for the publication of related rating outlooks where
element for the credit rating agency to assess creditwor
applicable. Such dates should be set on a Friday. Only
thiness of a sovereign entity or its financial instruments,
for unsolicited sovereign ratings should the number of
publications in the calendar be limited between two and
( 1 ) OJ L 96, 12.4.2003, p. 16.

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L 146/10
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Official Journal of the European Union
31.5.2013
and may be used in explaining the main reasons for a
provisions, the latter should only apply for the purpose
sovereign rating, direct or explicit requirements or
of the equivalence and endorsement assessments as of
recommendations from credit rating agencies to
1 June 2018. It is important to recall in this respect
sovereign entities as regards those policies should not
that a third-country regulatory regime does not have to
be allowed. Credit rating agencies should refrain from
have identical rules as those provided for in this Regu
any direct or explicit policy recommendations on
lation. As already provided for in Regulation (EC) No
policies of sovereign entities.
1060/2009, in order to be considered equivalent to or
as stringent as the Union regulatory regime, it should be
sufficient that the third-country regulatory regime achieve
the same objectives and effects in practice.
(46) Technical
standards
in
the
financial
services
sector
should
ensure an adequate protection of depositors, investors
and consumers across the Union. As a body with
highly specialised expertise, it would be efficient and
(49) Since the objectives of this Regulation, namely to
appropriate to entrust ESMA, with the elaboration of
reinforce the independence of credit rating agencies, to
draft regulatory and implementing technical standards
promote sound credit rating processes and methodol
which do not involve policy choices, for submission to
ogies, to mitigate the risks associated with sovereign
the Commission.
ratings, to reduce the risk of over-reliance on credit
ratings by market participants, and to ensure a right of
redress for investors, cannot be sufficiently achieved by
the Member States and can therefore, by reason of the
pan-Union structure and impact of the credit rating
activities to be supervised, be better achieved at the
Union level, the Union may adopt measures, in
(47) The Commission should adopt the draft regulatory
technical standards developed by ESMA regarding the
accordance with the principle of subsidiarity as set out
content, frequency and presentation of the information
in Article 5 of the Treaty on European Union. In
to be provided by issuers on structured finance instru
accordance with the principle of proportionality, as set
ments, the presentation of the information, including
out in that Article, this Regulation does not go beyond
structure, format, method and timing of reporting, that
what is necessary in order to achieve those objectives.
credit rating agencies should disclose to ESMA in relation
to the European rating platform and the content and
format of the periodic reporting on fees charged by
credit rating agencies for the purposes of ongoing super
vision by ESMA. The Commission should adopt those
(50) The
Commission
should
put
forward,
by
the
end
of
standards by means of delegated acts pursuant to
2013, a report regarding the feasibility of a network of
Article 290 TFEU and in accordance with Articles 10
smaller credit rating agencies in order to increase
to 14 of Regulation (EU) No 1095/2010.
competition in the market. That report should evaluate
Union financial and non-financial support and incentives
for the creation of such a network, taking into
consideration the potential conflicts of interest arising
from such public funding.
(48) Regulation
(EC) No 1060/2009 allows credit
ratings
issued in third countries to be used for regulatory
purposes if they are issued by credit rating agencies
certified in accordance with that Regulation or
endorsed by credit rating agencies established in the
(51) The European Data Protection Supervisor has been
Union in accordance with that Regulation. Certification
consulted in accordance with Article 28(2) of Regulation
requires that the Commission has adopted an equivalence
(EC) No 45/2001 of the European Parliament and of the
decision regarding the third country’s regulatory regime
Council of 18 December 2000 on the protection of
for credit rating agencies and endorsement requires that
individuals with regard to the processing of personal
the conduct of the third-country credit rating agency
data by the Community institutions and bodies and on
fulfils requirements which are at least as stringent as
the free movement of such data ( 1 ) and has adopted an
the relevant Union rules. Some of the provisions
opinion ( 2 ).
introduced by this Regulation should not apply to the
equivalence and endorsement assessments. This is the
case for those provisions that only establish obligations
on issuers but not on credit rating agencies. In addition,
provisions that relate to the structure of the credit rating
market within the Union rather than establishing rules of
(52) Regulation
(EC) No 1060/2009 should therefore be
conduct for credit rating agencies should not be
amended accordingly,
considered in this context. In order to grant third
countries sufficient time to review their regulatory
( 1 ) OJ L 8, 12.1.2001, p. 1.
frameworks regarding the remaining new substantive
( 2 ) OJ C 139, 15.5.2012, p. 6.

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EN
31.5.2013 Official
Journal
of
the
European
Union L
146/11
HAVE ADOPTED THIS REGULATION:
(ii) the following points are inserted:
Article 1
‘(pa) “credit institution” means a credit institution
Amendments to Regulation (EC) No 1060/2009
as defined in point (1) of Article 4 of
Directive 2006/48/EC;
Regulation (EC) No 1060/2009 is amended as follows:
(pb) “investment firm” means an investment firm
(1) Article
1
is
replaced
by
the
following:
as defined in point (1) of Article 4(1) of
Directive 2004/39/EC;
‘Article 1
Subject matter
(pc) “insurance undertaking” means an insurance
undertaking as defined in point (1) of
This Regulation introduces a common regulatory approach
Article 13 of Directive 2009/138/EC of the
in order to enhance the integrity, transparency, responsi
European Parliament and of the Council of
bility, good governance and independence of credit rating
25 November 2009 on the taking-up and
activities, contributing to the quality of credit ratings
pursuit of the business of Insurance and
issued in the Union and to the smooth functioning of
Reinsurance (Solvency II) (*);
the internal market, while achieving a high level of
consumer and investor protection. It lays down conditions
for the issuing of credit ratings and rules on the organi
sation and conduct of credit rating agencies, including
their shareholders and members, to promote credit
(pd) “reinsurance undertaking” means a
rating agencies’ independence, the avoidance of conflicts
reinsurance undertaking as defined in point
of interest, and the enhancement of consumer and investor
(4) of Article 13 of Directive 2009/138/EC;
protection.
(pe) “institution for occupational retirement
This Regulation also lays down obligations for issuers,
provision” means an institution for occupa
originators and sponsors established in the Union
tional retirement provision as defined in
regarding structured finance instruments.’;
Article 6(a) of Directive 2003/41/EC;
(2) in Article 2(1), Article 3(1)(m), Article 4(2), Article 4(3),
(pf) “management company” means a
introductory part, Article 4(4), first and second subpara
management company as defined in
graphs, Article 5(1), introductory part, Article 14(1), and
Article 2(1)(b) of Directive 2009/65/EC of
Annex II, point (1) ‘Community’ is replaced by ‘Union’;
the European Parliament and of the Council
of 13 July 2009 on the coordination of laws,
regulations and administrative provisions
relating to undertakings for collective
(3) Article
3
is
amended
as
follows:
investment in transferable securities
(UCITS) (**);
(a) paragraph 1 is amended as follows:
(pg) “investment company” means an investment
company authorised in accordance with
Directive 2009/65/EC;
(i) point (g) is replaced by the following:
(ph) “alternative investment fund manager” means
‘(g) “regulatory purposes” means the use of credit
an AIFM as defined in Article 4(1)(b) of
ratings for the specific purpose of complying
Directive 2011/61/EU of the European
with Union law, or with Union law as imple
Parliament and of the Council of 8 June
mented by the national legislation of the
2011 on Alternative Investment Fund
Member States;’;
Managers (***);

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L 146/12
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Official Journal of the European Union
31.5.2013
(pi) “central counterparty” means a CCP as
or other financial instrument is a State or
defined in point (1) of Article 2 of Regu
a regional or local authority of a State, or
lation (EU) No 648/2012 of the European
a special purpose vehicle of a State or of a
Parliament and of the Council of 4 July
regional or local authority;
2012 on OTC derivatives, central counter
parties and trade repositories (****) which is
authorised in accordance with Article 14 of
that Regulation;
(iii) a credit rating where the issuer is an inter
national financial institution established
by two or more States which has the
(pj) “prospectus” means a prospectus published
purpose of mobilising funding and
under Directive 2003/71/EC and Regulation
providing financial assistance for the
(EC) No 809/2004;
benefit of the members of that inter
national financial institution which are
experiencing or threatened by severe
___________
financing problems;
(*) OJ L 335, 17.12.2009, p. 1.
(**) OJ L 302, 17.11.2009, p. 32.
(***) OJ L 174, 1.7.2011, p. 1.
(****) OJ L 201, 27.7.2012, p. 1.’;
(w) “rating outlook” means an opinion regarding
the likely direction of a credit rating over the
short term, the medium term or both;
(iii) points (q) and (r) are replaced by the following:
(x) “unsolicited credit rating” and “unsolicited
‘(q) “sectoral legislation” means the legislative acts
sovereign rating” mean, respectively, a credit
of the Union referred to in points (pa) to (pj);
rating or a sovereign rating assigned by a
credit rating agency other than upon request;
(r) “sectoral competent authorities” means the
national competent authorities designated
(y) “credit score” means a measure of creditwor
under the relevant sectoral legislation for the
thiness derived from summarising and
supervision of credit institutions, investment
expressing data based only on a pre-estab
firms, insurance undertakings, reinsurance
lished statistical system or model, without
undertakings, institutions for occupational
any additional substantial rating-specific
retirement provision, management companies,
analytical input from a rating analyst;
investment companies, alternative investment
fund managers, central counterparties and
prospectuses.’;
(z) “regulated market” means a regulated market
as defined in point (14) of Article 4(1) of
(iv) the following points are added:
Directive 2004/39/EC and established in the
Union;
‘(s) “issuer” means an issuer as defined in
Article 2(1)(h) of Directive 2003/71/EC;
(aa) “re-securitisation” means re-securitisation as
defined in point (40a) of Article 4 of
(t) “originator”
means
an
originator
as
defined
in
Directive 2006/48/EC.’;
point (41) of Article 4 of Directive
2006/48/EC;
(b) the following paragraph is added:
(u) “sponsor” means a sponsor as defined in point
(42) of Article 4 of Directive 2006/48/EC;
‘3. For
the
purposes
of
this
Regulation,
the
term
“shareholder” includes beneficial owners, as defined
(v) “sovereign rating” means:
in point (6) of Article 3 of Directive 2005/60/EC of
the European Parliament and of the Council of
26 October 2005 on the prevention of the use of
(i) a credit rating where the entity rated is a
the financial system for the purpose of money laun
State or a regional or local authority of a
dering and terrorist financing (*).
State;
(ii) a credit rating where the issuer of the
___________
debt or financial obligation, debt security
(*) OJ L 309, 25.11.2005, p. 15.’;

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EN
31.5.2013 Official
Journal
of
the
European
Union L
146/13
(4) Article
4
is
amended
as
follows:
(b) paragraph 8 is replaced by the following:
(a) paragraph 1 is replaced by the following:
‘8. Articles
20,
23b
and
24
shall
apply
to
credit
‘1. Credit
institutions,
investment
firms,
insurance
rating agencies certified in accordance with Article 5(3)
undertakings, reinsurance undertakings, institutions
and to credit ratings issued by them.’;
for occupational retirement provision, management
companies, investment companies, alternative
investment fund managers and central counterparties
may use credit ratings for regulatory purposes only if
they are issued by credit rating agencies established in
(6) the
following
Articles
are
inserted
in
Title
I:
the Union and registered in accordance with this Regu
lation.
‘Article 5a
Where a prospectus contains a reference to a credit
rating or credit ratings, the issuer, offeror, or person
Over-reliance on credit ratings by financial
asking for admission to trading on a regulated market
institutions
shall ensure that the prospectus also includes clear and
prominent information stating whether or not such
1. The
entitites
referred
to
in
the
first
subparagraph
of
credit ratings are issued by a credit rating agency estab
Article 4(1) shall make their own credit risk assessment
lished in the Union and registered under this Regu
and shall not solely or mechanistically rely on credit
lation.’;
ratings for assessing the creditworthiness of an entity or
financial instrument.
(b) in paragraph 3, point (b) is replaced by the following:
2. Sectoral
competent
authorities
in
charge
of
super
‘(b) the credit rating agency has verified and is able to
vising the entities referred to in the first subparagraph of
demonstrate on an ongoing basis to the European
Article 4(1) shall, taking into account the nature, scale and
Supervisory Authority (European Securities and
complexity of their activities, monitor the adequacy of
Markets Authority) (ESMA) established by Regu
their credit risk assessment processes, assess the use of
lation (EU) No 1095/2010 of the European
contractual references to credit ratings and, where appro
Parliament and of the Council
(*), that the
priate, encourage them to mitigate the impact of such
conduct of the credit rating activities by the
references, with a view to reducing sole and mechanistic
third-country credit rating agency resulting in
reliance on credit ratings, in line with specific sectoral
the issuing of the credit rating to be endorsed
legislation.
fulfils requirements which are at least as
stringent as the requirements set out in Articles
6 to 12 and Annex I, with the exception of
Articles 6a, 6b, 8a, 8b, 8c and 11a, point (ba)
of point 3 and points 3a and 3b of Section B
Article 5b
of Annex I.
Reliance on credit ratings by the European
Supervisory Authorities and the European Systemic
___________
Risk Board
(*) OJ L 331, 15.12.2010, p. 84.’;
1. The
European
Supervisory
Authority
(European
Banking Authority) (EBA) established by Regulation (EU)
No 1093/2010 of the European Parliament and of the
Council (*), the European Supervisory Authority
(5) Article
5
is
amended
as
follows:
(European Insurance and Occupational Pensions Authority)
(EIOPA) established by Regulation (EU) No 1094/2010 of
the European Parliament and of the Council (**) and ESMA
(a) in paragraph 6, second subparagraph, point (b) is
shall not refer to credit ratings in their guidelines, recom
replaced by the following:
mendations and draft technical standards where such
references have the potential to trigger sole or mechanistic
reliance on credit ratings by the competent authorities, the
‘(b) credit rating agencies in that third country are
sectoral competent authorities, the entitites referred to in
subject to legally binding rules which are
the first subparagraph of Article 4(1) or other financial
equivalent to those set out in Articles 6 to 12
market participants. Accordingly, by 31 December 2013,
and Annex I, with the exception of Articles 6a,
EBA, EIOPA and ESMA shall review and remove, where
6b, 8a, 8b, 8c and 11a, point (ba) of point 3 and
appropriate, all such references to credit ratings in existing
points 3a and 3b of Section B of Annex I; and’;
guidelines and recommendations.

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L 146/14
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Official Journal of the European Union
31.5.2013
2. The
European
Systemic
Risk
Board
(ESRB)
estab
Section A of Annex I and Article 7(4) if the credit
lished by Regulation (EU) No 1092/2010 of the
rating agency is able to demonstrate that those
European Parliament and of the Council of 24 November
requirements are not proportionate in view of the
2010 on European Union macro-prudential oversight of
nature, scale and complexity of its business and the
the financial system and establishing a European Systemic
nature and range of issue of credit ratings and that:’;
Risk Board (***) shall not refer to credit ratings in its
warnings and recommendations where such references
have the potential to trigger sole or mechanistic reliance
on credit ratings.
(c) the following paragraph is added:
‘4. Credit
rating
agencies
shall
establish,
maintain,
Article 5c
enforce and document an effective internal control
Over-reliance on credit ratings in Union law
structure governing the implementation of policies
and procedures to prevent and mitigate possible
Without prejudice to its right of initiative, the Commission
conflicts of interest and to ensure the independence
shall continue to review whether references to credit
of credit ratings, rating analysts and rating teams
ratings in Union law trigger or have the potential to
regarding shareholders, administrative and
trigger sole or mechanistic reliance on credit ratings by
management bodies and sales and marketing activities.
the competent authorities, the sectoral competent auth
Credit rating agencies shall establish standard operating
orities, the entities referred to in the first subparagraph
procedures (SOPs) with regard to corporate
of Article 4(1) or other financial market participants
governance, organisation, and the management of
with a view to deleting all references to credit ratings in
conflicts of interest. They shall periodically monitor
Union law for regulatory purposes by 1 January 2020,
and review those SOPs in order to evaluate their effec
provided that appropriate alternatives to credit risk
tiveness and assess whether they should be updated.’;
assessment have been identified and implemented.
(8) the
following
articles
are
inserted:
___________
(*) OJ L 331, 15.12.2010, p. 12.
(**) OJ L 331, 15.12.2010, p. 48.
(***) OJ L 331, 15.12.2010, p. 1.’;
‘Article 6a
Conflicts of interest concerning investments in credit
rating agencies
1. A shareholder or a member of a credit rating agency
(7) Article
6
is
amended
as
follows:
holding at least 5 % of either the capital or the voting
rights in that credit rating agency or in a company
which has the power to exercise control or a dominant
influence over that credit rating agency, shall be prohibited
(a) paragraph 1 is replaced by the following:
from:
‘1. A
credit
rating
agency
shall
take
all
necessary
(a) holding 5 % or more of the capital of any other credit
steps to ensure that the issuing of a credit rating or
rating agency;
a rating outlook is not affected by any existing or
potential conflicts of interest or business relationship
involving the credit rating agency issuing the credit
(b) having the right or the power to exercise 5 % or more
rating or the rating outlook, its shareholders,
of the voting rights in any other credit rating agency;
managers, rating analysts, employees or any other
natural person whose services are placed at the
disposal or under the control of the credit rating
agency, or any person directly or indirectly linked to
(c) having the right or the power to appoint or remove
it by control.’;
members of the administrative or supervisory board of
any other credit rating agency;
(b) in paragraph 3, the introductory part is replaced by the
(d) being a member of the administrative or supervisory
following:
board of any other credit rating agency;
‘3. At
the
request
of
a
credit
rating
agency,
ESMA
(e) exercising or having the power to exercise control or a
may exempt a credit rating agency from complying
dominant influence over any other credit rating
with the requirements of points 2, 5, 6 and 9 of
agency.

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The prohibition referred to in point (a) of the first
The exemption set out in the second subparagraph shall
subparagraph does not apply to holdings in diversified
continue to apply at least until the credit rating agency
collective investment schemes, including managed funds
enters into a new contract for rating re-securitisations with
such as pension funds or life insurance, provided that
underlying assets from the same originator. Where the
the holdings in such schemes do not put the shareholder
criteria set out in the second subparagraph are not met
or member of a credit rating agency in a position to
when entering into such a contract, the period referred to
exercise significant influence on the business activities of
in paragraph 1 shall be calculated from the date on which
those schemes.
the new contract was entered into.
3. As
from
the
expiry
of
a
contract
pursuant
to
2. This
Article
does
not
apply
to
investments
in
other
paragraph 1, a credit rating agency shall not enter into a
credit rating agencies belonging to the same group of
new contract for the issuing of credit ratings on re-secu
credit rating agencies.
ritisations with underlying assets from the same originator
for a period equal to the duration of the expired contract
but not exceeding four years.
Article 6b
Maximum duration of the contractual relationship
The first subparagraph shall also apply to:
with a credit rating agency
1. Where a credit rating agency enters into a contract
for the issuing of credit ratings on re-securitisations, it
shall not issue credit ratings on new re-securitisations
with underlying assets from the same originator for a
(a) a credit rating agency belonging to the same group of
period exceeding four years.
credit rating agencies as the credit rating agency
referred to in paragraph 1;
2. Where a credit rating agency enters into a contract
(b) a credit rating agency which is a shareholder or
for rating re-securitisations, it shall request that the issuer:
member of the credit rating agency referred to in
paragraph 1;
(a) determine the number of credit rating agencies which
have a contractual relationship for the issuing of credit
(c) a credit rating agency in which the credit rating agency
ratings on re-securitisations with underlying assets
referred to in paragraph 1 is a shareholder or member.
from the same originator;
4. Notwithstanding
paragraph
1,
where
a
credit
rating
of a re-securitisation is issued before the end of the
(b) calculate the percentage of the total number of
maximum duration of the contractual relationship as
outstanding rated re-securitisations with underlying
referred to in paragraph 1, a credit rating agency may
assets from the same originator for which each credit
continue to monitor and update those credit ratings, on
rating agency issues credit ratings.
a solicited basis, for the duration of the re-securitisation.
5. This
Article
shall
not
apply
to
credit
rating
agencies
Where at least four credit rating agencies each rate more
that have fewer than 50 employees at group level involved
than 10 % of the total number of outstanding rated re-
in the provision of credit rating activities, or that have an
securitisations, the limitations set out in paragraph 1 shall
annual turnover generated from credit rating activities of
not apply.
less than EUR 10 million at group level.

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6. Where a credit rating agency enters into a contract
(c) the following paragraph is inserted:
for the issuing of credit ratings on re-securitisations before
20 June 2013, the period referred to in paragraph 1 shall
be calculated from that date.’;
‘5a. A
credit
rating
agency
that
intends
to
make
a
material change to, or use, new rating methodologies,
models or key rating assumptions which could have an
impact on a credit rating shall publish the proposed
(9) Article
7(5)
is
replaced
by
the
following:
material changes or proposed new rating method
ologies on its website inviting stakeholders to submit
comments for a period of one month together with a
detailed explanation of the reasons for and the impli
cations of the proposed material changes or proposed
‘5. Compensation and performance evaluation of
new rating methodologies.’;
employees involved in the credit rating activities or
rating outlooks, as well as persons approving the credit
ratings or rating outlooks, shall not be contingent on the
amount of revenue that the credit rating agency derives
(d) paragraph 6 is amended as follows:
from the rated entities or related third parties.’;
(i) the introductory part is replaced by the following:
(10) Article 8 is amended as follows:
‘6. Where
rating
methodologies,
models
or
key
rating assumptions used in credit rating activities
are changed in accordance with Article 14(3), a
credit rating agency shall:’;
(a) paragraph 2 is replaced by the following:
(ii) the following points are inserted:
‘2. A
credit
rating
agency
shall
adopt,
implement
and enforce adequate measures to ensure that the
credit ratings and the rating outlooks it issues are
‘(aa) immediately inform ESMA and publish on its
based on a thorough analysis of all the information
website the results of the consultation and
that is available to it and that is relevant to its analysis
the new rating methodologies together with
according to the applicable rating methodologies. It
a detailed explanation thereof and their date
shall adopt all necessary measures so that the
of application;
information it uses in assigning credit ratings and
rating outlooks is of sufficient quality and from
reliable sources. The credit rating agency shall issue
credit ratings and rating outlooks stipulating that the
rating is the agency’s opinion and should be relied
(ab) immediately publish on its website the
upon to a limited degree.
responses to the consultation referred to in
paragraph 5a except in cases where confiden
tiality is requested by the respondent to the
consultation;’;
2a. Changes
in
credit
ratings
shall
be
issued
in
accordance with the credit rating agency’s published
(e) the following paragraph is added:
rating methodologies.’;
‘7. Where
a
credit
rating
agency
becomes
aware
of
errors in its rating methodologies or in their appli
(b) in paragraph 5, the following subparagraph is added:
cation it shall immediately:
(a) notify those errors to ESMA and all affected rated
‘Sovereign ratings shall be reviewed at least every six
entities explaining the impact on its ratings
months.’;
including the need to review issued ratings;

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(b) where errors have an impact on its credit ratings,
explanation of the reasons for the deviation from the
publish those errors on its website;
announced calendar.
Article 8b
(c) correct those errors in the rating methodologies;
and
Information on structured finance instruments
1. The
issuer,
the
originator
and
the
sponsor
of
a
structured finance instrument established in the Union
shall, on the website set up by ESMA pursuant to
(d) apply the measures referred to in points (a), (b) and
paragraph 4, jointly publish information on the credit
(c) of paragraph 6.’;
quality and performance of the underlying assets of the
structured finance instrument, the structure of the securiti
sation transaction, the cash flows and any collateral
supporting a securitisation exposure as well as any
(11) the following Articles are inserted:
information that is necessary to conduct comprehensive
and well-informed stress tests on the cash flows and
collateral values supporting the underlying exposures.
‘Article 8a
2. The
obligation
under
paragraph
1
to
publish
Sovereign ratings
information shall not extend to where such publication
1. Sovereign
ratings
shall
be
issued
in
a
manner
which
would breach national or Union law governing the
ensures that the individual specificity of a particular
protection of confidentiality of information sources or
Member State has been analysed. A statement announcing
the processing of personal data.
revision of a given group of countries shall be prohibited if
it is not accompanied by individual country reports. Such
reports shall be made publicly available.
3. ESMA shall develop draft regulatory technical
standards to specify:
2. Public
communications
other
than
credit
ratings,
rating outlooks, or accompanying press releases or
(a) the information that the persons referred to in
reports as referred to in point 5 of Part I of Section D
paragraph 1 must publish in order to comply with
of Annex I, which relate to potential changes in sovereign
the obligation resulting from paragraph 1 in
ratings shall not be based on information within the
accordance with paragraph 2;
sphere of the rated entity that has been disclosed
without the consent of the rated entity, unless it is
available from generally accessible sources or unless
there are no legitimate reasons for the rated entity not
(b) the frequency with which the information referred to
to give its consent to the disclosure of the information.
in point (a) is to be updated;
(c) the presentation of the information referred to in point
3. A credit rating agency shall, taking into
(a) by means of a standardised disclosure template.
consideration the second subparagraph of Article 8(5),
publish on its website and submit to ESMA on an
annual basis, in accordance with point 3 of Part III of
Section D of Annex I, a calendar at the end of
ESMA shall submit those draft regulatory technical
December for the following 12 months, setting a
standards to the Commission by 21 June 2014.
maximum of three dates for the publication of unsolicited
sovereign ratings and related rating outlooks and setting
the dates for the publication of solicited sovereign ratings
and related rating outlooks. Such dates shall be set on a
Power is delegated to the Commission to adopt the regu
Friday.
latory technical standards referred to in the first
subparagraph in accordance with the procedure laid
down in Articles 10 to 14 of Regulation (EU) No
1095/2010.
4. Deviation
of
the
publication
of
sovereign
ratings
or
related rating outlooks from the calendar shall only be
possible where necessary for the credit rating agency to
4. ESMA
shall
set
up
a
website
for
the
publication
of
comply with its obligations under Article 8(2), Article 10(1)
the information on structured finance instruments as
and Article 11(1) and shall be accompanied by a detailed
referred to in paragraph 1.

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31.5.2013
Article 8c
available for rating the specific issuance or entity. Where
the issuer or a related third party does not appoint at least
Double credit rating of structured finance instruments
one credit rating agency with no more than 10 % of the
1. Where
an
issuer
or
a
related
third
party
intends
to
total market share, this shall be documented.
solicit a credit rating of a structured finance instrument, it
shall appoint at least two credit rating agencies to provide
credit ratings independently of each other.
2. With
a
view
to
facilitating
the
evaluation
by
the
issuer or a related third party under paragraph 1, ESMA
shall annually publish on its website a list of registered
2. The
issuer
or
a
related
third
party
as
referred
to
in
credit rating agencies, indicating their total market share
paragraph 1 shall ensure that the appointed credit rating
and the types of credit ratings issued, which can be used
agencies comply with the following conditions:
by the issuer as a starting point for its evaluation.
(a) they do not belong to the same group of credit rating
3. For
the
purposes
of
this
Article,
total
market
share
agencies;
shall be measured with reference to annual turnover
generated from credit rating activities and ancillary
services, at group level.’;
(b) they are not a shareholder or a member of any of the
other credit rating agencies;
(12) in Article 10, paragraphs 1 and 2 are replaced by the
following:
(c) they do not have the right or the power to exercise
voting rights in any of the other credit rating agencies;
‘1.
A credit rating agency shall disclose any credit rating
or rating outlook, as well as any decision to discontinue a
credit rating, on a non-selective basis and in a timely
(d) they do not have the right or the power to appoint or
manner. In the event of a decision to discontinue a
remove members of the administrative or supervisory
credit rating, the information disclosed shall include full
board of any of the other credit rating agencies;
reasons for the decision.
(e) none of the members of their administrative or super
The first subparagraph shall also apply to credit ratings
visory boards are a member of the administrative or
that are distributed by subscription.
supervisory boards of any of the other credit rating
agencies;
2. Credit
rating
agencies
shall
ensure
that
credit
ratings
and rating outlooks are presented and processed in
(f) they do not exercise, or have the power to exercise,
accordance with the requirements set out in Section D
control or a dominant influence over any of the other
of Annex I and shall not present factors other than
credit rating agencies.
those related to the credit ratings.
Article 8d
2a. Until
disclosure
to
the
public
of
credit
ratings,
rating outlooks and information relating thereto, they
Use of multiple credit rating agencies
shall be deemed to be inside information as defined in,
and in accordance with, Directive 2003/6/EC.
1. Where
an
issuer
or
a
related
third
party
intends
to
appoint at least two credit rating agencies for the credit
rating of the same issuance or entity, the issuer or a related
third party shall consider appointing at least one credit
rating agency with no more than 10 % of the total
Article 6(3) of that Directive shall apply mutatis mutandis
market share, which can be evaluated by the issuer or a
to credit rating agencies as regards their duty of confiden
related third party as capable of rating the relevant
tiality and their obligation to maintain a list of persons
issuance or entity, provided that, based on ESMA’s list
who have access to their credit ratings, rating outlooks or
referred to in paragraph 2, there is a credit rating agency
related information before disclosure.

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The list of persons to whom credit ratings, rating outlooks
The central repository referred to in Article 11(2) shall be
and information relating thereto are communicated before
incorporated in the European rating platform.
being disclosed shall be limited to persons identified by
each rated entity for that purpose.’;
3. This
Article
shall
not
apply
to
credit
ratings
or
rating
outlooks which are exclusively produced for and disclosed
to investors for a fee.’;
(13) in Article 10(5), the first subparagraph is replaced by the
following:
(16) in Article 14(3), the following subparagraph is added:
‘5. Where
a
credit
rating
agency
issues
an
unsolicited
credit rating, it shall state prominently in the credit rating,
‘Without prejudice to the second subparagraph, the credit
using a clearly distinguishable different colour code for the
rating agency shall notify ESMA of the intended material
rating category, whether or not the rated entity or a related
changes to the rating methodologies, models or key rating
third party participated in the credit rating process and
assumptions or the proposed new rating methodologies,
whether the credit rating agency had access to the
models or key rating assumptions when the credit rating
accounts, management and other relevant internal
agency publishes the proposed changes or proposed new
documents for the rated entity or a related third party.’;
rating methodologies on its website in accordance with
Article 8(5a). After the expiry of the consultation period,
the credit rating agency shall notify ESMA of any changes
due to the consultation.’;
(14) Article 11(2) is replaced by the following:
(17) Article 18(2) is replaced by the following:
‘2. A registered or certified credit rating agency shall
‘2. ESMA
shall
communicate
to
the
Commission,
EBA,
make available in a central repository established by
EIOPA, the competent authorities and the sectoral
ESMA information on its historical performance data,
competent authorities, any decision under Article 16, 17
including the ratings transition frequency, and information
or 20.’;
about credit ratings issued in the past and on their
changes. Such a credit rating agency shall provide
information to that repository on a standard form as
provided for by ESMA. ESMA shall make that information
(18) Article 19(1) is replaced by the following:
accessible to the public and shall publish summary
information on the main developments observed on an
annual basis.’;
‘1. ESMA
shall
charge
credit
rating
agencies
fees
in
accordance with this Regulation and with the Commission
regulation referred to in paragraph 2. Those fees shall fully
cover ESMA’s necessary expenditure relating to the regis
(15) the following Article is inserted:
tration, certification and supervision of credit rating
agencies and the reimbursement of any costs that the
competent authorities may incur carrying out work
pursuant to this Regulation, in particular as a result of
any delegation of tasks in accordance with Article 30.’;
‘Article 11a
European rating platform
1. A registered or certified credit rating agency shall,
(19) Article 21 is amended as follows:
when issuing a credit rating or a rating outlook, submit
to ESMA rating information, including the credit rating
and rating outlook of the rated instrument, information
(a) paragraph 4 is amended as follows:
on the type of credit rating, the type of rating action, and
date and hour of publication.
(i) the introductory part is replaced by the following:
2. ESMA
shall
publish
the
individual
credit
ratings
submitted to it pursuant to paragraph 1 on a website
‘4. ESMA shall develop draft regulatory
(“European rating platform”).
technical standards to specify:’;

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31.5.2013
(ii) point (e) is replaced by the following:
(b) how one or more mappings can be created
without misrepresenting credit ratings in light of
different rating methodologies;
‘(e) the content and format of ratings data
periodic reporting to be requested from
registered and certified credit rating agencies
(c) any effects mappings could have on the regulatory
for the purpose of ongoing supervision by
technical standards developed to date in relation to
ESMA.’;
Article 21(4a)(a) and (b).
(iii) the following subparagraphs are added after point
(e):
ESMA shall consult EBA and EIOPA in regard to
points (a) and (b) of the first subparagraph.’;
‘ESMA shall submit those draft regulatory
technical standards to the Commission by
(c) paragraph 5 is replaced by the following:
21 June 2014.
Power is delegated to the Commission to adopt
‘5. ESMA
shall
publish
an
annual
report
on
the
the regulatory technical standards referred to in
application of this Regulation. That report shall
the first subparagraph in accordance with the
contain, in particular, an assessment of the implemen
procedure laid down in Articles 10 to 14 of Regu
tation of Annex I by the credit rating agencies
lation (EU) No 1095/2010.’;
registered under this Regulation and an assessment
of the application of the endorsement mechanism
referred to in Article 4(3).’;
(b) the following paragraphs are inserted:
(20) in Article 22a, the title is replaced by the following:
‘4a. ESMA
shall
develop
draft
regulatory
technical
standards to specify:
‘Examination of compliance with methodology requirements’;
(a) the content and the presentation of the
information, including structure, format, method
(21) Article 25a is replaced by the following:
and timing of reporting that credit rating
agencies are to disclose to ESMA in accordance
with Article 11a(1); and
‘Article 25a
Sectoral competent authorities responsible for the
(b) the content and format of periodic reporting on
supervision and enforcement of Article 4(1) and
fees charged by credit rating agencies for the
Articles 5a, 8b, 8c and 8d
purpose of ongoing supervision by ESMA.
The sectoral competent authorities shall be responsible for
the supervision and enforcement of Article 4(1) and
ESMA shall submit those draft regulatory technical
Articles 5a, 8b, 8c and 8d in accordance with the
standards to the Commission by 21 June 2014.
relevant sectoral legislation.’;
Power is delegated to the Commission to adopt the
(22) the following title is inserted:
regulatory technical standards referred to in the first
subparagraph in accordance with the procedure laid
down in Articles 10 to 14 of Regulation (EU) No
1095/2010.
‘TITLE IIIA
CIVIL LIABILITY OF CREDIT RATING AGENCIES
4b. ESMA
shall
report
on
the
possibility
of
estab
Article 35a
lishing one or more mappings of credit ratings
submitted in accordance with Article 11a(1) and
Civil liability
submit that report to the Commission by 21 June
1. Where
a
credit
rating
agency
has
committed,
inten
2015. The report shall, in particular, assess:
tionally or with gross negligence, any of the infringements
listed in Annex III having an impact on a credit rating, an
investor or issuer may claim damages from that credit
(a) the possibility, cost, and benefit of establishing one
rating agency for damage caused to it due to that
or more mappings;
infringement.

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Union L
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An investor may claim damages under this Article where it
(a) points (a) and (b) are replaced by the following:
establishes that it has reasonably relied, in accordance with
Article 5a(1) or otherwise with due care, on a credit rating
‘(a) for the infringements referred to in points 1 to 5,
for a decision to invest into, hold onto or divest from a
11 to 15, 19, 20, 23, 26a to 26d, 28, 30, 32, 33,
financial instrument covered by that credit rating.
35, 41, 43, 50, 51 and 55 to 62 of Section I of
Annex III, the fines shall amount to at least EUR
An issuer may claim damages under this Article where it
500 000 and shall not exceed EUR 750 000;
establishes that it or its financial instruments are covered
by that credit rating and the infringement was not caused
(b) for the infringements referred to in points 6, 7, 8,
by misleading and inaccurate information provided by the
16, 17, 18, 21, 22, 22a, 24, 25, 27, 29, 31, 34,
issuer to the credit rating agency, directly or through
37 to 40, 42, 42a, 42b, 45 to 49a, 52, 53 and 54
information publicly available.
of Section I of Annex III, the fines shall amount to
at least EUR 300 000 and shall not exceed EUR
2. It
shall
be
the
responsibility
of
the
investor
or
issuer
450 000;’;
to present accurate and detailed information indicating
that the credit rating agency has committed an
(b) points (d) and (e) are replaced by the following:
infringement of this Regulation, and that that infringement
had an impact on the credit rating issued.
‘(d) for the infringements referred to in points 1, 6, 7,
8 and 9 of Section II of Annex III, the fines shall
What constitutes accurate and detailed information shall
amount to at least EUR 50 000 and shall not
be assessed by the competent national court, taking into
exceed EUR 150 000;
consideration that the investor or issuer may not have
access to information which is purely within the sphere
of the credit rating agency.
(e) for the infringements referred to in points 2, 3a to
5 of Section II of Annex III, the fines shall amount
to at least EUR 25 000 and shall not exceed EUR
3. The civil liability of credit rating agencies, as referred
75 000;’;
to in paragraph 1, shall only be limited in advance where
that limitation is:
(c) point (h) is replaced by the following:
(a) reasonable and proportionate; and
‘(h) for the infringements referred to in point 20a of
Section I of Annex III, points 4 to 4c, 6, 8 and 10
(b) allowed by the applicable national law in accordance
of Section III of Annex III, the fines shall amount
with paragraph 4.
to at least EUR 90 000 and shall not exceed EUR
200 000;’;
Any limitation that does not comply with the first
subparagraph, or any exclusion of civil liability shall be
(24) Article 39 is amended as follows:
deprived of any legal effect.
(a) paragraphs 1 and 3 are deleted;
4. Terms such as “damage”, “intention”, “gross negli
gence”, “reasonably relied”, “due care”, “impact”, “rea
(b) the following paragraphs are added:
sonable” and “proportionate” which are referred to in
this Article but are not defined, shall be interpreted and
applied in accordance with the applicable national law as
‘4. The
Commission
shall,
after
obtaining
technical
determined by the relevant rules of private international
advice from ESMA, review the situation in the credit
law. Matters concerning the civil liability of a credit rating
rating market for structured finance instruments, in
agency which are not covered by this Regulation shall be
particular the credit rating market for re-securitisations.
governed by the applicable national law as determined by
Following that review, the Commission shall, by 1 July
the relevant rules of private international law. The court
2016, submit a report to the European Parliament and
that is competent to decide on a claim for civil liability
to the Council, accompanied by a legislative proposal
brought by an investor or issuer shall be determined by
if appropriate, assessing, in particular:
the relevant rules of private international law.
(a) the availability of sufficient choice in order to
5. This
Article
does
not
exclude
further
civil
liability
comply with the requirements set out in Articles
claims in accordance with national law.
6b and 8c;
6. The right of redress set out in this Article shall not
(b) whether it is appropriate to shorten or extend the
prevent ESMA from fully performing its powers as laid
maximum duration of the contractual relationship
down in Article 36a.’;
referred to in Article 6b(1) and the minimum
period before the credit rating agency may re-
enter into a contract with an issuer or a related
(23) In Article 36a(2), the first subparagraph is amended as
third party for the issuing of credit ratings on re-
follows:
securitisations referred to in Article 6b(3);

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(c) whether it is appropriate to amend the exemption
6. The
Commission
shall,
at
least
annually,
inform
referred to in the second subparagraph of
the European Parliament and the Council of any new
Article 6b(2).
equivalence decisions referred to in Article 5(6) that
have been adopted during the reporting period.’;
5. The
Commission
shall,
after
obtaining
technical
advice from ESMA, review the situation in the credit
(25) Article 39a is replaced by the following:
rating market. Following that review, the Commission
shall, by 1 January 2016, submit a report to the
European Parliament and to the Council, accompanied
by a legislative proposal if appropriate, assessing, in
particular:
‘Article 39a
ESMA’s staffing and resources
By 21 June 2014, ESMA shall assess its staffing and
(a) whether there is a need to extend the scope of the
resources needs arising from the assumption of its
obligations referred to in Article 8b to include any
powers and duties under this Regulation and shall
other financial credit products;
submit a report to the European Parliament, the Council
and the Commission.’;
(b) whether the requirements referred to in Articles 6,
6a and 7 have sufficiently mitigated conflicts of
(26) the following Article is inserted:
interest;
‘Article 39b
(c) whether the scope of the rotation mechanism
referred to in Article 6b should be extended to
Reporting obligations
other asset classes and whether it is appropriate
1. By
31
December
2015,
the
Commission
shall
submit
to use differentiated lengths of periods across
a report to the European Parliament and to the Council
asset classes;
on:
(d) the appropriateness of existing and alternative
remuneration models;
(a) the steps taken as regards the deletion of references to
credit ratings which trigger or have the potential to
trigger sole or mechanistic reliance thereon; and
(e) whether there is a need to implement other
measures to foster competition in the credit
rating market;
(b) alternative tools to enable investors to make their own
credit risk assessment of issuers and of financial instru
ments,
(f) the appropriateness of additional initiatives to
promote competition in the credit rating market
against the background of the evolution of the
with a view to deleting all references to credit ratings in
structure of the sector;
Union law for regulatory purposes by 1 January 2020,
subject to appropriate alternatives being identified and
implemented. ESMA shall provide technical advice to the
Commission within the framework of this paragraph.
(g) whether there is a need to propose measures to
address contractual over-reliance on credit ratings;
2. Taking
into
consideration
the
situation
of
the
market, the Commission shall, by 31 December 2014,
(h) the market concentration levels, the risks arising
submit a report to the European Parliament and to the
from high concentration, and the impact on the
Council on the appropriateness of the development of a
overall stability of the financial sector.
European creditworthiness assessment for sovereign debt.

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Taking into consideration the findings of the report
Notwithstanding the first paragraph,
referred to in the first subparagraph and the situation of
the market, the Commission shall, by 31 December 2016,
submit a report to the European Parliament and to the
Council, on the appropriateness and feasibility of
(1) points 7(a), 9 and 10, point 11 in relation to Article 8d of
supporting a European credit rating agency dedicated to
Regulation (EC) No 1060/2009 and points 12 and 27 of
assessing the creditworthiness of Member States’ sovereign
Article 1 of this Regulation shall apply from 1 June 2018
debt and/or a European credit rating foundation for all
for the purposes of the assessment referred to in:
other credit ratings.
3. The
Commission
shall,
by
31
December
2013,
(a) Article 4(3)(b) of Regulation (EC) No 1060/2009 as to
submit a report to the European Parliament and to the
whether third-country requirements are at least as
Council regarding the feasibility of a network of smaller
stringent as the requirements referred to in that point;
credit rating agencies in order to increase competition in
and
the market. That report shall evaluate financial and non-
financial support for the creation of such a network,
taking into consideration the potential conflicts of
interest arising from such public funding. In light of the
(b) point (b) of the second subparagraph of Article 5(6) of
findings of that report and following ESMA’s technical
Regulation (EC) No 1060/2009 as to whether credit
advice, the Commission may re-evaluate and suggest
rating agencies in third countries are subject to legally
amending Article 8d.’;
binding rules which are equivalent to those referred to
in that point;
(27) Annex I is amended in accordance with Annex I to this
Regulation;
(28) Annex III is amended in accordance with Annex II to this
(2) point 8 of Article 1 of this Regulation in relation to
Regulation.
Article 6a(1)(a) of Regulation (EC) No 1060/2009 shall
apply from 21 June 2014 as regards any shareholder or
member of a credit rating agency which on 15 November
Article 2
2011 held 5 % or more of the capital of more than one
Entry into force
credit rating agency;
This Regulation shall enter into force on the twentieth day
following that of its publication in the Official Journal of the
European Union.
(3) point 15 of Article 1 shall apply from 21 June 2015.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Strasbourg, 21 May 2013.
For the European Parliament
For the Council
The President
The President
M. SCHULZ
L. CREIGHTON

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ANNEX I
Annex I to Regulation (EC) No 1060/2009 is amended as follows:
(1) Section B is amended as follows:
(a) point 1 is replaced by the following:
‘1. A credit rating agency shall identify, eliminate, or manage and disclose, clearly and prominently, any actual or
potential conflicts of interest that may influence the analyses and judgments of its rating analysts, employees,
or any other natural person whose services are placed at the disposal or under the control of the credit rating
agency and who are directly involved in credit rating activities and persons approving credit ratings and rating
outlooks.’;
(b) point 3 is amended as follows:
(i) in the first subparagraph, the introductory part is replaced by the following:
‘3. A credit rating agency shall not issue a credit rating or a rating outlook in any of the following
circumstances, or shall, in the case of an existing credit rating or rating outlook, immediately disclose
where the credit rating or rating outlook is potentially affected by the following:’;
(ii) the following point is inserted after point (a):
‘(aa) a shareholder or member of a credit rating agency holding 10 % or more of either the capital or the
voting rights of that credit rating agency or being otherwise in a position to exercise significant
influence on the business activities of the credit rating agency, holds 10 % or more of either the
capital or the voting rights of the rated entity or of a related third party, or of any other ownership
interest in that rated entity or third party, excluding holdings in diversified collective investment
schemes and managed funds such as pension funds or life insurance, which do not put him in a
position to exercise significant influence on the business activities of the scheme;’;
(iii) the following point is inserted after point (b):
‘(ba) the credit rating is issued with respect to a rated entity or a related third party which holds 10 % or
more of either the capital or the voting rights of that credit rating agency;’;
(iv) the following point is inserted after point (c):
‘(ca) a shareholder or member of a credit rating agency holding 10 % or more of either the capital or the
voting rights of that credit rating agency or being otherwise in a position to exercise significant
influence on the business activities of the credit rating agency, is a member of the administrative or
supervisory board of the rated entity or a related third party;’;
(v) the second subparagraph is replaced by the following:
‘A credit rating agency shall also immediately assess whether there are grounds for re-rating or withdrawing
the existing credit rating or rating outlook.’;
(c) the following points are inserted:
‘3a. A credit rating agency shall disclose where an existing credit rating or rating outlook is potentially affected
by either of the following:
(a) a shareholder or member of a credit rating agency holding 5 % or more of either the capital or the
voting rights of that credit rating agency or being otherwise in a position to exercise significant influence
on the business activities of the credit rating agency, holds 5 % or more of either the capital or the voting
rights of the rated entity or of a related third party, or of any other ownership interest in that rated entity
or third party. This excludes holdings in diversified collective investment schemes and managed funds
such as pension funds or life insurance, which do not put him in a position to exercise significant
influence on the business activities of the scheme;

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(b) a shareholder or member of a credit rating agency holding 5 % or more of either the capital or the
voting rights of that credit rating agency or being otherwise in a position to exercise significant influence
on the business activities of the credit rating agency, is a member of the administrative or supervisory
board of the rated entity or a related third party.
3b. Provided that the information is known or should be known by the credit rating agency, the obligations in
point 3(aa), (ba) and (ca) and point 3a shall also relate to:
(a) indirect shareholders covered by Article 10 of Directive 2004/109/EC; and
(b) companies that control or exercise a dominant influence, directly or indirectly, on the credit rating
agency, and which are covered by Article 10 of Directive 2004/109/EC.
3c. A credit rating agency shall ensure that fees charged to its clients for the provision of credit rating and
ancillary services are not discriminatory and are based on actual costs. Fees charged for credit rating services
shall not depend on the level of the credit rating issued by the credit rating agency or on any other result or
outcome of the work performed.’;
(d) in point 4, the first subparagraph is replaced by the following:
‘4. Neither a credit rating agency nor any person holding, directly or indirectly, at least 5 % of either the capital
or voting rights of the credit rating agency or being otherwise in a position to exercise significant influence on
the business activities of the credit rating agency shall provide consultancy or advisory services to the rated
entity or a related third party regarding the corporate or legal structure, assets, liabilities or activities of that
rated entity or related third party.’;
(e) point 7 is amended as follows:
(i) point (a) is replaced by the following:
‘(a) for each credit rating and rating outlook decision, the identity of the rating analysts participating in the
determination of the credit rating or rating outlook, the identity of the persons who have approved the
credit rating or rating outlook, information as to whether the credit rating was solicited or unsolicited,
and the date on which the credit rating action was taken;’;
(ii) point (d) is replaced by the following:
‘(d) the records documenting the established procedures and rating methodologies used by the credit rating
agency to determine credit ratings and rating outlooks;’;
(iii) point (e) is replaced by the following:
‘(e) the internal records and files, including non-public information and work papers, used to form the basis
of any credit rating and rating outlook decision taken;’;
(2) Section C is amended as follows:
(a) in point 2, the introductory part is replaced by the following:
‘2. No person referred to in point 1 shall participate in or otherwise influence the determination of a credit rating
or rating outlook of any particular rated entity if that person:’;
(b) in point 3, point (b) is replaced by the following:
‘(b) do not disclose any information about credit ratings, possible future credit ratings or rating outlooks of the
credit rating agency, except to the rated entity or a related third party;’;

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(c) point 7 is replaced by the following:
‘7. A person referred to in point 1 shall not take up a key management position with the rated entity or a related
third party within six months of the issuing of a credit rating or rating outlook.’;
(d) point 8 is replaced by the following:
‘8. For the purposes of Article 7(4):
(a) credit rating agencies shall ensure that the lead rating analysts shall not be involved in credit rating
activities related to the same rated entity or a related third party for a period exceeding four years;
(b) credit rating agencies other than those appointed by an issuer or a related third party and all credit rating
agencies issuing sovereign ratings shall ensure that:
(i) the rating analysts shall not be involved in credit rating activities related to the same rated entity or a
related third party for a period exceeding five years;
(ii) the persons approving credit ratings shall not be involved in credit rating activities related to the same
rated entity or a related third party for a period exceeding seven years.
The persons referred to in points (a) and (b) of the first subparagraph shall not be involved in credit rating
activities related to the rated entity or a related third party referred to in those points within two years of end
of the periods set out in those points.’;
(3) the title of Section D is replaced by the following:
‘Rules on the presentation of credit ratings and rating outlooks’;
(4) Part I of Section D is amended as follows:
(a) point 1 is replaced by the following:
‘1. A credit rating agency shall ensure that any credit rating and rating outlook states clearly and prominently the
name and job title of the lead rating analyst in a given credit rating activity and the name and position of the
person primarily responsible for approving the credit rating or rating outlook.’;
(b) point 2 is amended as follows:
(i) point (a) is replaced by the following:
‘(a) all substantially material sources, including the rated entity or, where appropriate, a related third party,
which were used to prepare the credit rating or rating outlook are indicated together with an indication as
to whether the credit rating or rating outlook has been disclosed to that rated entity or related third party
and amended following that disclosure before being issued;’;
(ii) points (d) and (e) are replaced by the following:
‘(d) the date at which the credit rating was first released for distribution and when it was last updated
including any rating outlooks is indicated clearly and prominently;
(e) information is given as to whether the credit rating concerns a newly issued financial instrument and
whether the credit rating agency is rating the financial instrument for the first time; and
(f) in the case of a rating outlook, the time horizon is provided during which a change in the credit rating is
expected.
When publishing credit ratings or rating outlooks, credit rating agencies shall include a reference to the
historical default rates published by ESMA in a central repository in accordance with Article 11(2), together
with an explanatory statement of the meaning of those default rates.’;

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(c) the following point is inserted:
‘2a. A credit rating agency shall accompany the disclosure of rating methodologies, models and key rating
assumptions with guidance which explains assumptions, parameters, limits and uncertainties surrounding
the models and rating methodologies used in credit ratings, including simulations of stress scenarios
undertaken by the credit rating agency when establishing the credit ratings, credit rating information on
cash-flow analysis it has performed or is relying upon and, where applicable, an indication of any expected
change in the credit rating. Such guidance shall be clear and easily comprehensible.’;
(d) point 3 is replaced by the following:
‘3. The credit rating agency shall inform the rated entity during working hours of the rated entity and at least a
full working day before publication of the credit rating or the rating outlook. That information shall include
the principal grounds on which the credit rating or rating outlook is based in order to give the rated entity an
opportunity to draw attention of the credit rating agency to any factual errors.’;
(e) the first subparagraph of point 4 is replaced by the following:
‘4. A credit rating agency shall state clearly and prominently when disclosing credit ratings or rating outlooks any
attributes and limitations of the credit rating or rating outlook. In particular, a credit rating agency shall
prominently state when disclosing any credit rating or rating outlook whether it considers satisfactory the
quality of information available on the rated entity and to what extent it has verified information provided to
it by the rated entity or a related third party. If a credit rating or a rating outlook involves a type of entity or
financial instrument for which historical data is limited, the credit rating agency shall make clear, in a
prominent place, such limitations.’;
(f) the first subparagraph of point 5 is replaced by the following:
‘5. When announcing a credit rating or a rating outlook, a credit rating agency shall explain in its press releases
or reports the key elements underlying the credit rating or the rating outlook.’;
(g) the following point is added:
‘6. A credit rating agency shall disclose on its website, and notify ESMA on an ongoing basis, information about
all entities or debt instruments submitted to it for their initial review or for preliminary rating. Such disclosure
shall be made whether or not issuers contract with the credit rating agency for a final rating.’;
(5) points 3 and 4 of Part II of Section D are deleted;
(6) in Section D, the following Part is added:
‘III. Additional obligations in relation to sovereign ratings
1. Where a credit rating agency issues a sovereign rating or a related rating outlook, it shall simultaneously
provide a detailed research report explaining all the assumptions, parameters, limits and uncertainties and any
other information taken into account in determining that sovereign rating or rating outlook. That report shall
be publicly available, clear and easily comprehensible.
2. A publicly available research report accompanying a change compared to the previous sovereign rating or
related rating outlook shall include at least the following:
(a) a detailed evaluation of the changes to the quantitative assumption justifying the reasons for the rating
change and their relative weight. The detailed evaluation should include a description of the following: per
capita income, GDP Growth, inflation, fiscal balance, external balance, external debt, an indicator for
economic development, an indicator for default and any other relevant factor taken into account. This
should be complemented with the relative weight of each factor;
(b) a detailed evaluation of the changes to the qualitative assumption justifying the reasons for the rating
change and their relative weight;
(c) a detailed description of the risks, limits and uncertainties related to the rating change; and
(d) a summary of minutes of the meeting of the rating committee that decided on the rating change.

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3. Without prejudice to point 3 of Part I of Section D of Annex I, where a credit rating agency issues sovereign
ratings or related rating outlooks, it shall publish them in accordance with Article 8a, after the close of
business hours of regulated markets and at least one hour before their opening.
4. Without prejudice to point 5 of Part I of Section D of Annex I, in accordance with which, when announcing a
credit rating, a credit rating agency is to explain in its press releases or reports the key elements underlying
the credit rating and although national policies may serve as an element underlying a sovereign rating, policy
recommendations, prescriptions or guidelines to rated entities, including States or regional or local authorities
of States, shall not be part of sovereign ratings or rating outlooks.’;
(7) in Part I of Section E, point 3 is replaced by the following:
‘3. the policy of the credit rating agency concerning the publication of credit ratings and other related communi
cations including rating outlooks;’;
(8) in the first subparagraph of point 2 of Part II of Section E, point (a) is replaced by the following:
‘(a) list
of
fees
charged
to
each
client
for
individual
credit
ratings
and
any
ancillary
services;
(aa) its pricing policy, including the fees structure and pricing criteria in relation to credit ratings for different asset
classes;’;
(9) Part III of Section E is amended as follows:
(a) point 3 is replaced by the following:
‘3. statistics on the allocation of its staff to new credit ratings, credit rating reviews, methodology or model
appraisal and senior management, and on the allocation of staff to rating activities with regard to the different
asset classes (corporate — structured finance — sovereign);’;
(b) point 7 is replaced by the following:
‘7. financial information on the revenue of the credit rating agency, including total turnover, divided into fees
from credit rating and ancillary services with a comprehensive description of each, including the revenues
generated from ancillary services provided to clients of credit rating services and the allocation of fees to credit
ratings of different asset classes. Information on total turnover shall also include a geographical allocation of
that turnover to revenues generated in the Union and revenues worldwide;’.

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ANNEX II
Annex III to Regulation (EC) No 1060/2009 is amended as follows:
(1) Section I is amended as follows:
(a) points 19 to 22 are replaced by the following:
‘19. The credit rating agency infringes Article 6(2), in conjunction with point 1 of Section B of Annex I, by not
identifying, eliminating, or managing and disclosing, clearly or prominently, any actual or potential conflicts
of interest that may influence the analyses or judgments of its rating analysts, employees, or any other
natural person whose services are placed at the disposal or under the control of the credit rating agency and
who are directly involved in credit rating activities or persons approving credit ratings and rating outlooks.
20. The credit rating agency infringes Article 6(2), in conjunction with the first paragraph of point 3 of Section
B of Annex I, by issuing a credit rating or rating outlook in any of the circumstances set out in the first
paragraph of that point or, in the case of an existing credit rating or rating outlook, by not disclosing
immediately that the credit rating or rating outlook is potentially affected by those circumstances.
20a. The credit rating agency infringes Article 6(2), in conjunction with point 3a of Section B of Annex I, by not
disclosing that an existing credit rating or rating outlook is potentially affected by any of the circumstances
set out in letters (a) and (b) of that point.
21. The credit rating agency infringes Article 6(2), in conjunction with the second paragraph of point 3 of
Section B of Annex I, by not immediately assessing whether there are grounds for re-rating or withdrawing
an existing credit rating or rating outlook.
22. The credit rating agency infringes Article 6(2), in conjunction with the first paragraph of point 4 of Section
B of Annex I, by rating entities where the credit rating agency itself or any person holding, directly or
indirectly, at least 5 % of either the capital or the voting rights of the credit rating agency, or being
otherwise in a position to exercise significant influence on the business activities of the credit rating
agency, provides consultancy or advisory services to that rated entity or a related third party regarding
the corporate or legal structure, assets, liabilities or activities of that rated entity or related third party.’;
(b) the following point is inserted:
‘22a. The credit rating agency infringes Article 6a(1) when one of its shareholders or members holding at least
5 % of the capital or the voting rights in that credit rating agency or in a company which has the power to
exercise control or a dominant influence over that credit rating agency, is in breach of one of the
prohibitions set out in points (a) to (e) of that paragraph, with the exception of that set out in point (a)
for holdings in diversified collective investment schemes, including managed funds such as pension funds or
life insurance, provided that the holdings in such schemes do not put the shareholder or member of a credit
rating agency in a position to exercise significant influence on the business activities of those schemes.’;

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(c) the following points are inserted:
‘26a. The credit rating agency which entered into a contract for the issuing of credit ratings on re-securitisations
infringes Article 6b(1) by issuing credit ratings on new re-securitisations with underlying assets from the
same originator for a period exceeding four years.
26b. The credit rating agency which entered into a contract for the issuing of credit ratings on re-securitisations
infringes Article 6b(3) by entering into a new contract for the issuing of credit ratings on re-securitisations
with underlying assets from the same originator for a period equal to the duration of the expired contract
referred to in paragraphs1 and 2 of Article 6b but not exceeding four years.’;
(d) point 33 is replaced by the following:
‘33. The credit rating agency infringes Article 7(3), in conjunction with point 2 of Section C of Annex I, by not
ensuring that a person referred to in point 1 of that Section does not participate in or otherwise influence
the determination of a credit rating or rating outlook as set out in point 2 of that Section.’;
(e) point 36 is replaced by the following:
‘36. The credit rating agency infringes Article 7(3), in conjunction with point 7 of Section C of Annex I, by not
ensuring that a person referred to in point 1 of that Section does not take up a key management position
with the rated entity or a related third party within six months of the issuing of a credit rating or rating
outlook.’;
(f) points 38, 39 and 40 are replaced by the following:
‘38. The credit rating agency infringes Article 7(4), in conjunction with point (i) of point (b) of the first
paragraph of point 8 Section C of Annex I, by not ensuring that, where it provides unsolicited credit
ratings or sovereign ratings, a rating analyst is not involved in credit rating activities related to the same
rated entity or a related third party for a period exceeding five years.
39. The credit rating agency infringes Article 7(4), in conjunction with point (ii) of point (b) of the first
paragraph of point 8 of Section C of Annex I, by not ensuring that, where it provides unsolicited credit
ratings or sovereign ratings, a person approving credit ratings is not involved in credit rating activities related
to the same rated entity or a related third party for a period exceeding seven years.
40. The credit rating agency infringes Article 7(4), in conjunction with the second paragraph of point 8 of
Section C of Annex I, by not ensuring that a person referred to in points (a) and (b) of the first paragraph of
that point is not involved in credit rating activities related to the rated entity or a related third party referred
to in those points within two years of the end of the periods set out in those points.’;
(g) point 42 is replaced by the following:
‘42. The credit rating agency infringes Article 8(2) by not adopting, implementing or enforcing adequate
measures to ensure that the credit ratings and rating outlooks it issues are based on a thorough analysis
of all the information that is available to it and that is relevant to its analysis according to the applicable
rating methodologies.’;
(h) the following points are inserted:
‘42a. The credit rating agency infringes Article 8(2) by using information falling outside the scope of Article 8(2).

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42b. The credit rating agency infringes Article 8(2a) by issuing changes in credit ratings that do not comply with
its published rating methodologies.’;
(i) point 46 is replaced by the following:
‘46. The credit rating agency infringes the first sentence of the first subparagraph of Article 8(5) by not
monitoring its credit ratings other than sovereign ratings or by not reviewing its credit ratings other than
sovereign ratings or rating methodologies on an ongoing basis or at least annually.’;
(j) the following point is inserted:
‘46a. The credit rating agency infringes the second subparagraph of Article 8(5), in conjunction with the first
sentence of the first subparagraph of Article 8(5), by not monitoring its sovereign ratings or by not
reviewing its sovereign ratings on an ongoing basis or at least every six months.’;
(k) the following point is inserted:
‘49a. The credit rating agency infringes point (c) of Article 8(6), in conjunction with point (c) of Article 8(7), by
not re-rating a credit rating where errors in the rating methodologies or in their application affect that
credit rating.’;
(l) the following points are added:
‘55. The credit rating agency infringes Article 8a(3) by not publishing on its website, or by not submitting to
ESMA on an annual basis, in accordance with point 3 of Part III of Section D of Annex I, a calendar at the
end of December for the following 12 months, setting a maximum of three dates that fall on a Friday for the
publication of unsolicited sovereign ratings and related rating outlooks and setting dates that fall on a Friday
for the publication of solicited sovereign ratings and related rating outlooks.
56. The credit rating agency infringes Article 8a(4) by deviating from the announced calendar where this is not
necessary to fulfil its obligations under Article 8(2), Article 10(1) or Article 11(1) or by not providing a
detailed explanation of the reasons for the deviation from the announced calendar.
57. The credit rating agency infringes Article 10(2), in conjunction with point 3 of Part III of Section D of
Annex I, by publishing a sovereign rating or a related rating outlook during business hours of regulated
markets or less than one hour before their opening.
58. The credit rating agency infringes Article 10(2), in conjunction with point 4 of Part III of Section D of
Annex I, by including policy recommendations, prescriptions or guidelines to rated entities, including States
or regional or local authorities of States, as part of a sovereign rating or a related rating outlook.
59. The credit rating agency infringes Article 8a(2) by basing its public communications relating to changes in
sovereign ratings, and which are not credit ratings, rating outlooks or accompanying press releases, as
referred to in point 5 of Part I of Section D of Annex I, on information within the sphere of the rated
entity, where such information has been disclosed without the consent of the rated entity, unless it is
available from generally accessible sources or unless there are no legitimate reasons for the rated entity
not to give its consent to the disclosure of the information.

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60. The credit rating agency infringes Article 8a(1) by not issuing individual publicly available country reports
when announcing the revision of a given group of countries.
61. The credit rating agency infringes point 1 of Part III of Section D of Annex I by issuing a sovereign rating or
a related rating outlook without simultaneously providing a detailed research report explaining all the
assumptions, parameters, limits and uncertainties and any other information taken into account in deter
mining that sovereign rating or rating outlook or by not making that report publicly available, clear and
easily comprehensible.
62. The credit rating agency infringes point 2 of Part III of Section D of Annex I by not issuing a publicly
available research report accompanying a change compared to the previous sovereign rating or related rating
outlook or by not including in that report at least the information referred to in point 2(a) to (d) of Part III
of Section D of Annex I.’;
(2) Section II is amended as follows:
(a) the following points are inserted:
‘3a. The credit rating agency infringes the third subparagraph of Article 14(3) by not notifying ESMA of the
intended material changes to the existing rating methodologies, models or key rating assumptions or of the
proposed new rating methodologies, models or key rating assumptions when it publishes the rating method
ologies on its website in accordance with Article 8(5a).
3b. The credit rating agency infringes the first subparagraph of Article 8(5a) by not publishing on its website the
proposed new rating methodologies or the proposed material changes to the rating methodologies that could
have an impact on a credit rating together with an explanation of the reasons for and the implications of the
changes.
3c. The credit rating agency infringes point (a) of Article 8(7) by not notifying ESMA of discovered errors in its
rating methodologies or in their application or by not explaining their impact on its credit ratings, including
the need to review its issued credit ratings.’;
(b) the following point is inserted:
‘4a. The credit rating agency infringes Article 11a(1) by not making available the required information or by not
providing that information in the required format as referred to in that paragraph.’;
(c) point 7 is replaced by the following:
‘7. The credit rating agency infringes Article 23b(1) by failing to provide information in response to a decision
requiring information pursuant to Article 23b(3), or by providing incorrect or misleading information in
response to a simple request for information or a decision.’;
(d) point 8 is replaced by the following:
‘8. The credit rating agency infringes point (c) of Article 23c(1) by failing to provide an explanation, or by
providing an incorrect or misleading explanation, on facts or documents related to to the subject matter and
purpose of an inspection.’;

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EN
31.5.2013 Official
Journal
of
the
European
Union L
146/33
(3) Section III is amended as follows:
(a) the following points are inserted:
‘4a. The credit rating agency infringes point (aa) of Article 8(6), where it intends to use new rating methodol
ogies, by not informing ESMA or by not publishing immediately on its website the results of the consul
tation and those new rating methodologies together with a detailed explanation thereof and their date of
application.
4b. The credit rating agency infringes point (a) of Article 8(7) by not notifying affected rated entities of
discovered errors in its rating methodologies or in their application,or by not explaining the impact on
its credit ratings, including the need to review its issued credit ratings.
4c. The credit rating agency infringes point (b) of Article 8(7) by not publishing on its website discovered errors
in its rating methodologies or in their application where such errors have an impact on the credit rating
agency’s credit ratings.’;
(b) points 6 and 7 are replaced by the following:
‘6. The credit rating agency infringes Article 10(2), in conjunction with point 1 or 2, the first paragraph of point
4 or points 5 or 6, of Part I of Section D of Annex I, or Parts II or III of Section D of Annex I, by not
providing the information as required by those provisions when presenting a credit rating or a rating outlook.
7. The credit rating agency infringes Article 10(2), in conjunction with point 3 of Part I of Section D of Annex I,
by not informing the rated entity during working hours of the rated entity and at least a full working day
before publication of the credit rating or the rating outlook.’.

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Document Outline

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