Securitisation and Regulation News

Reports on First Examinations of CRAs

The European Securities and Markets Authority (ESMA) published a report on the supervision of Credit Rating Agencies (CRAs) registered in the European Union. The report provides an overview of ESMA’s supervisory activity and summarises the results of the first examinations ESMA conducted in December 2011 of three groups of CRAs. The report identifies several shortcomings and areas for improvement that apply to a varying extent to all CRAs including: transparency of rating methodologies, disclosure and presentation of ratings; adequacy of controls over IT systems; recording of core internal processes and decisions; and adequacy of resources devoted to internal control functions and analytical business lines. ESMA has not determined whether any of the observations in the report constitute a breach of the CRA Regulation and will follow-up on the observations through risk-mitigation plans for each individual CRA in the first half of 2012.

ESMA report