On 1 December 2025, the Financial Conduct Authority (FCA) set out findings from its multi-firm review into the effectiveness and governance of rating committees at UK registered credit rating agencies (CRAs).

Background

The FCA set out that these findings apply to UK registered CRAs and may also be relevant to those who use credit ratings or engage with CRAs such as issuers, investors, intermediaries, trade associations and regulatory bodies, and that this work follows on from the FCA’s portfolio letter sent to CRAs in November 2024.

Key findings

The FCA highlighted the following key findings:

  • Governance of rating committees: The FCA made clear that rating committees are essential in assigning and reviewing credit ratings and therefore it expects CRAs to operate rating committees with independence, consistency, and transparency. As a result, areas for improvement included ensuring that firms have clear rating committee policies (e.g. terms of reference); that these policies made clear the use of committees in the assignment of preliminary ratings and their transition to final ratings, suspensions, withdrawals and affirmations; and also that firms should review their approach to email-based committees to ensure robust discussion and decision making.
  • Composition and role of rating committee members: The FCA set out that it expects the composition of each rating committee to reflect the nature and complexity of the credit under review and that the rating committee should include appropriately trained, experienced and independent analytical staff. The FCA also emphasised the importance of the role of the Chair and that they facilitate objective discussions that apply the relevant methodology and encourage a culture of accountability and challenge and, finally, that CRAs should ensure that minimum quorum requirements are met.
  • How the rating committee operates: The FCA emphasised that rating committees must apply methodologies consistently to uphold ratings quality, but that it had concerns that outcomes may vary based on how a committee operates. Therefore, the FCA suggested that areas for improvement included measures to increase visibility, promote consistency and maintain standards at ratings committee meetings such as by considering the format of meetings and encouraging effective challenge.
  • Effectiveness of monitoring methods and tools: The FCA also set out that CRAs must establish and maintain effective internal control structures to prevent conflicts of interest and ensure independence of credit ratings, such as by engaging in effective risk, compliance and internal audit review of these findings.

Next Steps

The FCA made clear that CRAs should reflect on how these findings apply to their business and consider adopting relevant examples of good practice. The FCA also set out that it plans to further engage with firms to assess the effectiveness of internal control structures for the rating committee.