On 28 January, the European Securities and Markets Authority (ESMA) issued a consultation paper on the Credit Ratings Agency Regulation (CRA) for private credit ratings.
In the consultation paper ESMA is proposing to revise paragraphs 14 and 15 of the existing ESMA Guidelines and Recommendations on the Scope of the CRA in order to provide greater clarity on the exemptions for private ratings under the CRA.
The revisions address the following key elements of private credit ratings:
- How the term “produced pursuant to an individual order” should be interpreted and understood;
- How the term “provided exclusively to the person who placed the order” should be interpreted and understood;
- The boundaries on the sharing of a private credit rating with a “limited number of third parties”; and
- The monitoring of the distribution of private credit ratings by the ratings producer.
The deadline for comments is 11 March 2022. ESMA expects to publish its final report by the end of Q2 2022.