CESR’s overall conclusion is that they are broadly compliant with the IOSCO Code. However, there are a number of provisions on which these CRAs deviate from the IOSCO Code and give room for improvement.
CESR’s overall conclusion with respect to the codes of conduct of the larger, global CRAs (S&P, Moody’s, Fitch, DBRS and AM Best) is that they are broadly compliant with the IOSCO Code.
There are a number of provisions on which these CRAs deviate from the IOSCO Code and give room for improvement.
CESR has noted two provisions of the updated 2008 IOSCO Code, specifically concerning structured finance ratings, from which most of these CRAs deviate.
The requirement to prohibit analysts from making proposals or recommendations regarding the design of structured finance products that a CRA rates.
The requirement to disclose in the rating announcement whether the issuer of a structured finance product has informed the CRA that it is publicly disclosing all relevant information about the product being rated or if the information remains non-public.
With respect to the other EU CRAs, CESR has identified that about a third have not adopted any code of conduct and strongly recommends that these CRAs consider implementing the IOSCO Code as a matter of priority.
CESR also identifies that the large majority of the CRAs which have adopted and published codes of conduct have not adopted the 2008 amendments to the IOSCO Code. These CRAs have explained that they are awaiting the incoming EU legislation to update their codes of conduct.
CESR acknowledges this point and encourages swift adoption of the 2008 IOSCO Code once the EU legislation is finalised.
Full report
© CESR - Committee of European Securities Regulators
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