On 12 November 2008 the European Commission published a draft Regulation (EC) 1060/2009 on credit rating agencies (CRAs), whose amended version was approved on 23 April 2009 by the European Parliament and on 27 July 2009 by the Council. The Regulation was signed on September 16 and entered into force on 7 December 2009. Consequently, CRAs that wish to operate in the Community must apply for registration under the terms of the Regulation and comply, at all times, with the organizational, operational, procedural and disclosure requirements.

CESR is publishing this annual report in accordance with article 21(4) of Regulation (EC) 1060/2009, in order to provide information to the public about the application of the Regulation in the EU and, in particular, to comment on the implementation of the requirements established in Annex I of the Regulation by the credit rating agencies. This is the first annual report published by CESR in the fulfilment of its obligations under article 21.

At the time of the publication of this report only one credit rating agency has been registered, while assessment of the other 23 applications received by CESR between the 7th of June and the 7th of September 2010 is proceeding within the colleges of supervisors or the individual home competent authorities. This provides details relating to issues that refer to:

• the applications received from individual CRAs;
• the applications received from groups of CRAs; and
• the assessment of third countries legal frameworks regarding CRAs.

The first assessments of the applications that have been performed during the autumn of this year have served as preliminary tests for the functioning of the colleges of competent authorities. In this respect the main difficulties that have emerged are linked to the problem of ensuring consistency across colleges. As opposed to the case of colleges, the assessments carried out by individual competent authorities on the applications submitted by local CRAs have proceeded at a faster pace in the course of 2010.

However, competent authorities may have to face difficult decisions in ensuring that the application of the proportionality principle to local CRAs does not prejudice fulfilment of the overarching principles of the Regulation.

As the registration process is still pending for the large majority of the applications submitted by credit rating agencies, this report can only provide a high level description of the status of the application of Regulation (EC) 1060/2009. CESR is in fact not in the position to report in detail about the implementation of the requirements set out in Annex I of the Regulation, as the final shape of the policies, procedures and arrangements adopted for those purposes by the credit rating agencies will depend on the outcome of the interaction with the competent authorities as part the supervisory assessments concerning the applications for registration or certification.

Full report