Board of Appeal of the European Supervisory Authorities dismisses appeal made by a refused CRA-applicant against ESMA

On 10 January 2014, the Board of Appeal of the European Supervisory Authorities handed down its decision on an appeal by the appellant, Global Private Rating Company "Standard Rating" Ltd, against the refusal by the European Securities and Markets Authority (ESMA) to register it as a credit rating agency.  This is the first appeal against a decision by ESMA refusing an applicant registration as a credit rating agency.

The Board of Appeal unanimously decided that the appeal should be dismissed, and that ESMA's refusal decision should be confirmed.  It stated that it accepted the appellant's point that the registration of a credit rating agency by ESMA is a new process, and recognised that the procedures will to an extent take time fully to work out.  Nevertheless, because of the responsibilities placed on credit rating agencies and their importance in the financial system generally, it considered that the onus must be on an applicant to satisfy ESMA that the relevant requirements are met.  The application and its contents must be very clear, and it is not ESMA's responsibility as regulator to remedy deficiencies.