On 18 July 2018, the European Securities and Markets Authority (ESMA) published supplementary guidance on the application of the endorsement regime for non-EU credit ratings under the Credit Rating Agencies Regulation. The supplementary guidelines assist EU credit rating agencies (CRAs) in assessing whether a third-country CRA’s internal requirements meet the as stringent as test. This is done by setting out the general principles underpinning the as stringent as test and providing a non-exhaustive list of alternative internal requirements which ESMA considers to pass the test. The identified alternative requirements relate to:
- fees charged by CRAs;
- analyst rotation;
- pre-publication of issuer notification;
- certain rating disclosures (transparency report, initial reviews and preliminary ratings); and
- the treatment of inside information.