CESR has published a report which analyses the extent to which the codes of conduct of EU based credit rating agencies comply with the IOSCO's voluntary code of conduct fundamentals for credit rating agencies. It follows an IOSCO report on this issue which was published earlier this year.

The larger global CRA's such as Moodys and Fitch are broadly in line with the code with the exception of the following structured finance rating provisions:

  • The requirements to prohibit analysts from making proposal recommendations regarding the design of structured finance products that is CRA rated.
  • The requirement to disclose whether the issuer of a structured finance product has informed the CRA that it is publicly disclosing all relevant information by the product being rated or if the information remains non-public.  

The report also finds that of the other EU based CRA's about a third do not have a code at all. The majority of CRA's based in the EU have codes which have not updated them to reflect the changes introduced in the 2008 version and instead are waiting for the EU legislation on the regulation of credit rating agencies to be finalised.