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The European Securities and Markets Authority (ESMA) has today announced that it considers the regulatory framework for credit rating agencies (CRAs) of South Africa to be as stringent as European Union rules.
This decision allows a European CRA to endorse credit ratings issued by its South African subsidiary or parent company. Endorsed credit ratings may be used for regulatory purposes in the EU.
In order to facilitate the exchange of regulatory information, and as a precondition to endorsement, ESMA has also entered into a co-operation agreement for the supervision of CRAs with the competent South African authority, the Financial Services Board. The cooperation agreement recognises the cross-border activities of certain CRAs and the global nature of ratings generally and the importance of ongoing supervisory and enforcement-related cooperation in this area.
The MoU is effective from 30 June 2016
