The European Securities and Markets Authority (ESMA) has formally approved the certification in the European Union of Egan-Jones Ratings Co. (EJR), an U.S. American credit rating agency (CRA), under Article 16 of the CRA Regulation. The certification takes effect from 12 December 2014.
EJR is headquartered in Haverford (Pennsylvania, USA) and is subject to registration, supervision and enforcement by the U.S. Securities and Exchange Commission as a “Nationally Recognized Statistical Rating Organization”.
While the registration regime applies to CRAs that are established in the EU, certification is only available for third country registered and supervised CRAs, that are not established in the EU and which are not of systemic importance to the financial stability or integrity of the financial markets of one or more Member States.
As a certified CRA, credit ratings issued by EJR can be used for regulatory purposes according to EU legislation. The certified CRA must continue to comply, on an on-going basis, with the regulatory requirements set out under the CRA Regulation and ESMA’s Regulatory Technical Standards.
Currently, 23 CRAs have been registered and four CRAs have been certified including EJR. Amongst the 23 registered CRAs, three operate under a group structure, totalling 17 legal entities in the EU, which means that the total number of CRA entities registered in the EU is now 37.
ESMA’s supervisory mandate applies to all credit rating agencies registered or certified in the EU which issue credit ratings disclosed publicly or distributed by subscription.
The exercise of that supervision includes the possibility to impose sanctions and other forms of penalties in case of breaches of the requirements of the Regulation. Those requirements include the obligation to be registered or certified by ESMA before engaging in rating activities.
2014/1486 Public Statement
FTSE Mondo Visione Exchanges Index:
ESMA Certifies Egan-Jones Ratings Co. To Operate In The EU
Date 12/12/2014