30 November 2010
The Committee of European Banking Supervisors (CEBS) has today published its revised Guidelines on the recognition of External Credit Assessment Institutions (ECAIs), which were first released on 20 January 2006.
To ensure consistency between Regulation (EC) No. 1060/2009 on Credit Rating Agencies (hereafter, the Regulation on CRAs) and the Capital Requirements Directive (in particular, Directive 2006/48/EC, hereafter, CRD), Articles 81(2) and 97(2) of the CRD have been amended to avoid duplication of work and to reduce the burden of the recognition process where an ECAI is registered as a CRA at Community level.
In this context, CEBS has reviewed its Guidelines on the recognition of ECAIs to make clear that for CRAs, which are registered under the Regulation on CRAs, the only criteria that should be assessed in the ECAIs' initial recognition process and on-going review are the technical criteria on ‘Credibility and Market Acceptance' and ‘Transparency and Disclosure' with respect to their individual credit assessments. The remaining technical criteria are assessed during the registration process under the Regulation on CRAs and are considered to be satisfied for the purposes of the ECAIs' recognition process.
In addition, drawing on the experience of CEBS members in the application of the guidelines, CEBS has taken this opportunity to review its common understanding of the technical criteria set out in Part 2 of Annex VI of the CRD, and has slightly amended its understanding of the requirements on ‘Credibility and Market Acceptance' and ‘Transparency and Disclosure' with respect to the individual credit assessments.
In reviewing its guidelines, CEBS has benefited from the views gathered from market participants through the responses to the public consultation (CP37) which ended on 9 April 2010.
In light of the comments received, it has not been deemed necessary to amend the content of the revised guidelines proposed for consultation.
The amendments to Articles 81(2) and 97(2) of the CRD will have to be applied from 31 December 2010. Therefore, CEBS expects its members to apply the revised guidelines at the same time as the amended Articles will come into force.