On December 16, 2014, the European Securities and Markets Authority  (“ESMA”) published a report on the way credit rating agencies (“CRAs”) monitor their structured finance credit ratings. The report involves the following CRAs:

DBRS Ratings, Fitch Ratings, Moody’s Investors Service and Standard & Poor’s. ESMA’s findings concludes that certain CRAs do not complete annual reviews of ratings in a timely manner and lack quality control over the information used and obtained from data providers. ESMA also identified inadequacies in relation to disclosure and transparency practices that could be detrimental to investors. ESMA requests that CRAs introduce remedial procedures to resolve these issues and has stated that it will follow up with each of the CRAs individually to ensure that the issues identified are resolved appropriately.

The report is available at:

http://www.esma.europa.eu/system/files/esma-2014-1524_cra_public_report_on_sf_investigation.pdf.