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.