The European Securities and Markets Authority (ESMA) has published a Thematic Report on fees charged by Credit Rating Agencies (CRAs) and Trade Repositories (TRs).
ESMA’s key areas of concern across the CRA and TR industries with regard to the fee provisions and where improvements are needed in the CRAs / TRs practices:
- transparency and disclosure: need to ensure sufficiency and clarity of information to actual and potential clients as well as to ESMA, aiming at reducing the existing information gap between CRAs / TRs and other stakeholders;
- fee-setting process, including cost monitoring and related controls: need to ensure that cost is a key pricing factor and sufficient controls are in place in order to demonstrate that the regulatory objectives are met; and
- interaction with related entities: need to ensure that group support and/or interaction with related entities do not conflict with the non-discrimination and cost-based/cost-related principles, and that ESMA has sufficient information to identify possible risks.
ESMA’s Chair, Steven Maijoor, has stated that ESMA will give supervisory priority to the issues identified regarding transparency and disclosure, the fee-setting process and interaction with entities related to CRAs and TRs.
ESMA may decide to provide further supervisory guidance to ensure compliance with the relevant requirements.
View ESMA thematic report on fees charged by Credit Rating Agencies and Trade Repositories, 11 January 2018