The Commission has adopted a proposal for a Regulation on credit rating agencies. The proposals include rules to ensure CRAs:
- ensure conflicts of interest do not affect ratings;
- are vigilant on the quality of their methodology and ratings;
- act transparently and publish an annual transparency report;
- do not provide advisory services;
- cannot rate financial instruments if they do not have sufficient quality information to base their ratings on;
- must disclose the models, methodologies and key assumptions on which they base their ratings;
- create an internal function to review the quality of their ratings; and
- have at least three independent directors on their boards whose remuneration cannot depend on the business performance of the rating agency. At least one of them should be an expert in securitisation and structured finance.
In some areas, the proposals go further than the IOSCO standards.