Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (Text with EEA relevance) (c. 1060)

1. Introductory Text

2. TITLE I SUBJECT MATTER, SCOPE AND DEFINITIONS

   1. Article 1. Subject matter

   2. Article 2. Scope

   3. Article 3. Definitions

   4. Article 4. Use of credit ratings

   5. Article 5. Equivalence and certification based on equivalence

   6. Article 5a. Over-reliance on credit ratings by financial institutions

   7. Article 5b. Reliance on credit ratings by the European Supervisory Authorities and the European Systemic Risk Board

   8. Article 5c. Over-reliance on credit ratings in Union law

3. TITLE II ISSUING OF CREDIT RATINGS

   1. Article 6. Independence and avoidance of conflicts of interest

   2. Article 6a. Conflicts of interest concerning investments in credit rating agencies

   3. Article 6b. Maximum duration of the contractual relationship with a credit rating agency

   4. Article 7. Rating analysts, employees and other persons involved in the issuing of credit ratings

   5. Article 8. Methodologies, models and key rating assumptions

   6. Article 8a. Sovereign ratings

   7. Article 8b. Information on structured finance instruments

   8. Article 8c. Double credit rating of securitisation instruments

   9. Article 8d. Use of multiple credit rating agencies

   10. Article 9. Outsourcing

   11. Article 10. Disclosure and presentation of credit ratings

   12. Article 11. General and periodic disclosures

   13. Article 11a. Public rating database

   14. Article 12. Transparency report

   15. Article 13. Public disclosure fees

4. TITLE III SURVEILLANCE OF CREDIT RATING ACTIVITIES

   1. CHAPTER I Registration procedure

      1. Article 14. Requirement for registration

      2. Article 15. Application for registration

      3. Article 16. Examination of the application for registration of a credit rating agency by the FCA

      4. Article 17. Examination of the applications for registration of a group of credit rating agencies by the FCA

      5. Article 18. Notification of decisions

      6. Article 18A. Upper Tribunal

      7. Article 19. Registration and supervisory fees

      8. Article 20. Withdrawal of registration

   2. CHAPTER II Supervision by the FCA

      1. Article 21. The FCA

      2. Article 22. Competent authorities

      3. Article 22a. Examination of compliance with methodology requirements

      4. Article 23. Non-interference with content of ratings or methodologies

      5. Article 23a. Exercise of the powers referred to in Articles 23b to 23d

      6. Article 23b. Requests for information

      7. Article 23c. General investigations

      8. Article 23d. On-site inspections

      9. Article 23e. Procedural rules for taking supervisory measures and imposing fines

      10. Article 24. Supervisory measures

      11. Article 25. Hearing of the persons concerned

      12. Article 25a. Sectoral competent authorities responsible for the supervision and enforcement of Article 4(1) and Articles 5a, 8b, 8c and 8d

   3. CHAPTER III Professional secrecy

      1. Article 26. Obligation to cooperate

      2. Article 27. Exchange of information

      3. Article 28. Cooperation in case of a request with regard to on-site inspections or investigations

      4. Article 29. Colleges of competent authorities

      5. Article 30. Delegation of tasks by ESMA to competent authorities

      6. Article 31. Notifications and suspension requests by competent authorities

      7. Article 32. Professional secrecy

      8. Article 33. Disclosure of information from another Member State

   4. CHAPTER IV Cooperation with third countries

      1. Article 34. Agreement on exchange of information

      2. Article 35. Disclosure of information from third countries

5. TITLE IIIA CIVIL LIABILITY OF CREDIT RATING AGENCIES

   1. Article 35a. Civil liability

6. TITLE IV Amendment to Annexes

   1. CHAPTER I Penalties, fines, periodic penalty payments, committee procedure, delegated powers and reporting

      1. Article 36. Penalties

      2. Article 36a. Fines

      3. Article 36b. Periodic penalty payments

      4. Article 36c. Hearing of the persons subject to the proceedings

      5. Article 36d. Disclosure, nature, enforcement and allocation of fines and periodic penalty payments

      6. Article 36e. Review by the Court of Justice of the European Union

      7. Article 37. Amendments to Annexes

      8. Article 38. Treasury Regulations

      9. Article 38a. Exercise of the delegation

      10. Article 38b. Revocation of the delegation

      11. Article 38c. Objections to delegated acts

      12. Article 39. Reports

      13. Article 39a. ESMA’s staffing and resources

      14. Article 39b. Reporting obligations

   2. CHAPTER II Transitional and final provisions

      1. Article 40. Transitional provision

      2. Article 40a. Transitional measures related to ESMA

      3. Article 41. Entry into force

7. Signature

8. 1. ANNEX I

      INDEPENDENCE AND AVOIDANCE OF CONFLICTS OF INTEREST

      1. Section A Organisational requirements

         1. 1. The credit rating agency shall have an administrative or supervisory...

         2. 2. A credit rating agency shall be organised in a way...

         3. 3. A credit rating agency shall establish adequate policies and procedures...

         4. 4. A credit rating agency shall have sound administrative and accounting...

         5. 5. A credit rating agency shall establish and maintain a permanent...

         6. 6. In order to enable the compliance function to discharge its...

         7. 7. A credit rating agency shall establish appropriate and effective organisational...

         8. 8. A credit rating agency shall employ appropriate systems, resources and...

         9. 9. A credit rating agency shall establish a review function responsible...

         10. 10. A credit rating agency shall monitor and evaluate the adequacy...

      2. Section B Operational requirements

         1. 1. A credit rating agency shall identify, eliminate, or manage and...

         2. 2. A credit rating agency shall disclose to the public the...

         3. 3. A credit rating agency shall not issue a credit rating...

         4. 3a. A credit rating agency shall disclose where an existing credit...

         5. 3b. Provided that the information is known or should be known...

         6. 3c. A credit rating agency shall ensure that fees charged to...

         7. 4. Neither a credit rating agency nor any person holding, directly...

         8. 5. A credit rating agency shall ensure that rating analysts or...

         9. 6. A credit rating agency shall design its reporting and communication...

         10. 7. A credit rating agency shall arrange for adequate records and,...

         11. 8. Records and audit trails referred to in point 7 shall...

         12. 9. Records which set out the respective rights and obligations of...

      3. Section C Rules on rating analysts and other persons directly involved in credit rating activities

         1. 1. Rating analysts, employees of the credit rating agency as well...

         2. 2. No person referred to in point 1 shall participate in...

         3. 3. Credit rating agencies shall ensure that persons referred to in...

         4. 4. Persons referred to in point 1 shall not solicit or...

         5. 5. If a person referred to in point 1 considers that...

         6. 6. Where a rating analyst terminates his or her employment and...

         7. 7. A person referred to in point 1 shall not take...

         8. 8. For the purposes of Article 7(4):

      4. Section D Rules on the presentation of credit ratings and rating outlooks

         1. I. General obligations

            1. 1. A credit rating agency shall ensure that any credit rating...

            2. 2. A credit rating agency shall ensure that at least:

            3. 2a. A credit rating agency shall accompany the disclosure of rating...

            4. 3. The credit rating agency shall inform the rated entity during...

            5. 4. A credit rating agency shall state clearly and prominently when...

            6. 5. When announcing a credit rating or a rating outlook, a...

            7. 6. A credit rating agency shall disclose on its website, and...

         2. II. Additional obligations in relation to credit ratings of securitisation instruments...

            1. 1. Where a credit rating agency rates a securitisation instrument, it...

            2. 2. A credit rating agency shall state what level of assessment...

            3. 3. . . . . . . . . . ....

            4. 4. . . . . . . . . . ....

         3. III. Additional obligations in relation to sovereign ratings

            1. 1. Where a credit rating agency issues a sovereign rating or...

            2. 2. A publicly available research report accompanying a change compared to...

            3. 3. Without prejudice to point 3 of Part I of Section...

            4. 4. Without prejudice to point 5 of Part I of Section...

      5. Section E Disclosures

         1. I. General disclosures

            2. 1. any actual and potential conflicts of interest referred to in...

            3. 2. a list of its ancillary services;

            4. 3. the policy of the credit rating agency concerning the publication...

            5. 4. the general nature of its compensation arrangements;

            6. 5. the methodologies, and descriptions of models and key rating assumptions...

            7. 6. any material modification to its systems, resources or procedures; and...

            8. 7. where relevant, its code of conduct.

         2. II. Periodic disclosures

            2. 1. every six months, data about the historical default rates of...

            3. 2. annually, the following information:

         3. III. Transparency report

            2. 1. detailed information on legal structure and ownership of the credit...

            3. 2. a description of the internal control mechanisms ensuring quality of...

            4. 3. statistics on the allocation of its staff to new credit...

            5. 4. a description of its record-keeping policy;

            6. 5. the outcome of the annual internal review of its independent...

            7. 6. a description of its management and rating analyst rotation policy;...

            8. 7. financial information on the revenue of the credit rating agency,...

            9. 8. a governance statement within the meaning of the United Kingdom...

   2. ANNEX II

      INFORMATION TO BE PROVIDED IN THE APPLICATION FOR REGISTRATION

      1. 1. Full name of the credit rating agency, address of the...

      2. 2. Name and contact details of a contact person and of...

      3. 3. Legal status

      4. 4. Class of credit ratings for which the credit rating agency...

      5. 5. Ownership structure

      6. 6. Organisational structure and corporate governance

      7. 7. Financial resources to perform credit rating activities

      8. 8. Staffing of credit rating agency and its expertise

      9. 9. Information regarding subsidiaries of credit rating agency

      10. 10. Description of the procedures and methodologies used to issue and...

      11. 11. Policies and procedures to identify, manage and disclose any conflicts...

      12. 12. Information regarding rating analysts

      13. 13. Compensation and performance evaluation arrangements

      14. 14. Services other than credit rating activities, which the credit rating...

      15. 15. Programme of operations, including indications of where the main business...

      16. 16. Documents and detailed information related to the expected use of...

      17. 17. Documents and detailed information related to the expected outsourcing arrangements...

   3. ANNEX III

      ...

      1. I. Infringements related to conflicts of interest, organisational or operational requirements...

      2. II. Infringements related to obstacles to the supervisory activities

      3. III. Infringements related to disclosure provisions

   4. ANNEX IV

      List of the coefficients linked to aggravating and mitigating factors for the application of Article 36a(3)

      1. The following coefficients shall be applicable in a cumulative way...

      2. I. Adjustment coefficients linked to aggravating factors

      3. II. Adjustment coefficients linked to mitigating factors