On 5 December 2019, the European Securities and Markets Authority (ESMA) published a consultation paper setting out proposals for internal controls for credit rating agencies (CRAs).

The draft guidelines set out the criteria that CRAs should have in place to meet the requirements of the CRA Regulation with a particular focus on their internal controls framework and functions, to demonstrate to ESMA that adequate and effective internal controls systems exist to ensure the accuracy and integrity of the credit rating process.

The draft guidelines are contained in Annex II of the consultation paper. ESMA notes that these guidelines have been developed with a view to accommodate the proportionality that is provided for smaller CRAs under Article 6(3) of the CRA Regulation.

The deadline for comments to the consultation is 16 March 2020. ESMA expects to publish a final report by Q3 2020.