Compilation of ratings
According to EU Regulation No. 1060/2009 (the EU Regulation on Credit Rating Agencies), ratings must only be performed by registered rating agencies. The registration and the supervision of EU credit rating agencies and their activities fall into the purview of the European Securities and Markets Authority (ESMA) which is based in Paris. Since 2011, when Creditreform Rating was registered pursuant to EU Regulation No. 1060/2009, our rating activities have been subject to the supervision of ESMA.
Creditreform Rating concentrates on the compilation of ratings that meet the requirements of the supervisory authorities. The use of our ratings for achieving regulatory compliance has been approved by the two European authorities which together supervise the financial markets, i.e. the European Banking Authority (EBA) and the European Insurance And Occupational Pensions Authority (EIOPA). European financial institutions can therefore base their calculations of equity capital requirements on our ratings.
Approval as ECAI
Based on EU Regulation No. 575/2013 (the Capital Requirements Regulation), Creditreform Rating has been approved as an External Credit Assessment Institution (ECAI) by the European Banking Authority EBA. The Joint Committee of the European Supervisory Authorities (featuring representatives from EBA, EIOPA, and ESMA) has provided us with the mapping that is needed to calculate equity capital requirements. In a further step of approval, it has been officially stated that the financial institutions under European supervision are allowed to use solicited as well as unsolicited Creditreform ratings for their own compliance processes.
EIOPA, the body in charge of supervising the European insurance industry, has equally approved the use of Creditreform ratings for regulatory purposes by implementing the relevant European legislation to ensure the supply of supervised banks and insurance providers with adequate financial resources pursuant to the requirements of ESMA, EBA, and EIOPA. A corresponding mapping has also been provided.
"Smaller Rating Agency"
Creditreform Rating has been categorized as a “smaller rating agency“ (defined as an agency with a market share of less than 10 percent) pursuant to EU Regulation No. 462/2013 (CRA III Regulation). The Regulation aims to intensify the competition on the credit rating market and calls for measures to strengthen smaller agencies and to boost their growth. It also subjects the issue of bonds and structured finance instruments to a range of requirements. For example: an issuer who intends to commission more than one rating for a single issue or entity shall be obliged “to consider appointing“ a smaller rating agency. Issues of structured finance instruments shall require two ratings, and the possibility of appointing a smaller rating agency must be considered. Given this regulatory framework, Creditreform Rating has been successfully offering its services to many large financial institutions, ensuring that their ratings of capital market transactions comply with European regulatory requirements and establishing itself as a reliable partner in the process.
For more details on the registration and supervision of credit rating agencies, the ECAI approval process, mappings and the compatibility of our ratings with regulatory requirements, please see the following links: