Consultation paper (CP43) on CEBS's advice to the European Commission on the non-eligibility of entities producing only credit scores for ECAI recognition (CP43)
Start Date: 13/10/2010 | Deadline: 13/11/2010
The Committee of European Banking Supervisors (CEBS) today publishes its consultation paper (CP43) on its draft advice to the European Commission on the non-eligibility of entities producing only credit scores for ECAI recognition. CEBS proposes an amendment to Directive 2006/48/EC introducing a requirement that an ECAI has to be registered in accordance with Regulation (EC) No 1060/2009 on Credit Rating Agencies (CRAs) as a precondition for being recognised as an eligible ECAI for capital requirement purposes. The consultation is open to all interested parties, including supervised institutions and other market participants.
Article 4 of the Regulation on CRAs (hereinafter ‘the Regulation') states that credit institutions, investment firms, and other types of institutions may use credit ratings for regulatory purposes only if the latter are issued by CRAs established in the Community and registered in accordance with the Regulation.
However, there are certain entities to which the Regulation does not apply and which could – potentially – be eligible to apply for ECAI recognition without being registered in accordance with the Regulation: the Central Banks and those entities producing only credit scores. CEBS agrees that Central Banks excluded from the scope of the Regulation are still eligible for ECAI recognition./p>
The case of entities producing only credit scores is, however, different. Currently, the Regulation and Directive 2006/48/EC allow these entities to apply for ECAI recognition without requiring them to meet any of the requirements set out in the Regulation. This causes a lack of transparency for both supervisors and the market.
CEBS submits its initial views for a public consultation which starts today and runs until 13 November 2010. Comments received will be published on CEBS's website unless respondents request otherwise. Please send your comments to the following email address: firstname.lastname@example.org