The European Supervisory Authorities (ESAs) (which consists of the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA)) have published a joint final report on mechanistic references to credit ratings in the ESAs’ guidelines and recommendations.
The joint final report includes the following:
- section II sets out the feedback statement to the ESAs’ joint Consultation Paper published on 7 November 2013;
- section III provides a definition for “sole or mechanistic reliance”. The definition has been developed taking into account the comments received during the earlier consultation and will be used by the ESAs going forward;
- section IV provides general examples of rating references to illustrate the concept of sole or mechanistic reliance;
- section V lists provisions from the EBA, EIOPA and ESMA guidelines and recommendations containing rating references that should not be viewed as sole or mechanistic;
- section VI lists a set of provisions that do require revision according to the ESAs, which includes ESMA’s guidelines on money market funds;
- Annex 1 contains an impact assessment; and
- Annex II lists the references to ratings contained in the Solvency II Directive.