Subject matter

This Regulation introduces a common regulatory approach in order to enhance the integrity, transparency, responsibility, good governance and independence of credit rating activities, contributing to the quality of credit ratings issued in the Union and to the smooth functioning of the internal market, while achieving a high level of consumer and investor protection. It lays down conditions for the issuing of credit ratings and rules on the organisation and conduct of credit rating agencies, including their shareholders and members, to promote credit rating agencies’ independence, the avoidance of conflicts of interest, and the enhancement of consumer and investor protection.

This Regulation also lays down obligations for issuers, originators and sponsors established in the Union regarding structured finance instruments.’;

in Article 2(1), Article 3(1)(m), Article 4(2), Article 4(3), introductory part, Article 4(4), first and second subparagraphs, Article 5(1), introductory part, Article 14(1), and Annex II, point (1) ‘Community’ is replaced by ‘Union’;

Article 3 is amended as follows:

paragraph 1 is amended as follows:

point (g) is replaced by the following:

“regulatory purposes” means the use of credit ratings for the specific purpose of complying with Union law, or with Union law as implemented by the national legislation of the Member States;’;

the following points are inserted:

“credit institution” means a credit institution as defined in point (1) of Article 4 of Directive 2006/48/EC;

“investment firm” means an investment firm as defined in point (1) of Article 4(1) of Directive 2004/39/EC;

“insurance undertaking” means an insurance undertaking as defined in point (1) of Article 13 of Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) ( *1 ) ;

“reinsurance undertaking” means a reinsurance undertaking as defined in point (4) of Article 13 of Directive 2009/138/EC;

“institution for occupational retirement provision” means an institution for occupational retirement provision as defined in Article 6(a) of Directive 2003/41/EC;

“management company” means a management company as defined in Article 2(1)(b) of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) ( *2 ) ;

“investment company” means an investment company authorised in accordance with Directive 2009/65/EC;

“alternative investment fund manager” means an AIFM as defined in Article 4(1)(b) of Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers ( *3 ) ;

“central counterparty” means a CCP as defined in point (1) of Article 2 of Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories ( *4 ) which is authorised in accordance with Article 14 of that Regulation;

“prospectus” means a prospectus published under Directive 2003/71/EC and Regulation (EC) No 809/2004;

( *1 ) OJ L 335, 17.12.2009, p. 1 ."

( *2 ) OJ L 302, 17.11.2009, p. 32 ."

( *3 ) OJ L 174, 1.7.2011, p. 1 ."

( *4 ) OJ L 201, 27.7.2012, p. 1 .’;"

points (q) and (r) are replaced by the following:

“sectoral legislation” means the legislative acts of the Union referred to in points (pa) to (pj);

“sectoral competent authorities” means the national competent authorities designated under the relevant sectoral legislation for the supervision of credit institutions, investment firms, insurance undertakings, reinsurance undertakings, institutions for occupational retirement provision, management companies, investment companies, alternative investment fund managers, central counterparties and prospectuses.’;

the following points are added:

“issuer” means an issuer as defined in Article 2(1)(h) of Directive 2003/71/EC;

“originator” means an originator as defined in point (41) of Article 4 of Directive 2006/48/EC;

“sponsor” means a sponsor as defined in point (42) of Article 4 of Directive 2006/48/EC;

“sovereign rating” means:

a credit rating where the entity rated is a State or a regional or local authority of a State;

a credit rating where the issuer of the debt or financial obligation, debt security or other financial instrument is a State or a regional or local authority of a State, or a special purpose vehicle of a State or of a regional or local authority;

a credit rating where the issuer is an international financial institution established by two or more States which has the purpose of mobilising funding and providing financial assistance for the benefit of the members of that international financial institution which are experiencing or threatened by severe financing problems;

“rating outlook” means an opinion regarding the likely direction of a credit rating over the short term, the medium term or both;

“unsolicited credit rating” and “unsolicited sovereign rating” mean, respectively, a credit rating or a sovereign rating assigned by a credit rating agency other than upon request;

“credit score” means a measure of creditworthiness derived from summarising and expressing data based only on a pre-established statistical system or model, without any additional substantial rating-specific analytical input from a rating analyst;

“regulated market” means a regulated market as defined in point (14) of Article 4(1) of Directive 2004/39/EC and established in the Union;

“re-securitisation” means re-securitisation as defined in point (40a) of Article 4 of Directive 2006/48/EC.’;

the following paragraph is added:

‘3. For the purposes of this Regulation, the term “shareholder” includes beneficial owners, as defined in point (6) of Article 3 of Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing ( *5 ) .

( *5 ) OJ L 309, 25.11.2005, p. 15 .’;"

Article 4 is amended as follows:

paragraph 1 is replaced by the following:

‘1. Credit institutions, investment firms, insurance undertakings, reinsurance undertakings, institutions for occupational retirement provision, management companies, investment companies, alternative investment fund managers and central counterparties may use credit ratings for regulatory purposes only if they are issued by credit rating agencies established in the Union and registered in accordance with this Regulation.

Where a prospectus contains a reference to a credit rating or credit ratings, the issuer, offeror, or person asking for admission to trading on a regulated market shall ensure that the prospectus also includes clear and prominent information stating whether or not such credit ratings are issued by a credit rating agency established in the Union and registered under this Regulation.’;

in paragraph 3, point (b) is replaced by the following:

the credit rating agency has verified and is able to demonstrate on an ongoing basis to the European Supervisory Authority (European Securities and Markets Authority) (ESMA) established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council ( *6 ) , that the conduct of the credit rating activities by the third-country credit rating agency resulting in the issuing of the credit rating to be endorsed fulfils requirements which are at least as stringent as the requirements set out in Articles 6 to 12 and Annex I, with the exception of Articles 6a, 6b, 8a, 8b, 8c and 11a, point (ba) of point 3 and points 3a and 3b of Section B of Annex I.

( *6 ) OJ L 331, 15.12.2010, p. 84 .’;"

Article 5 is amended as follows:

in paragraph 6, second subparagraph, point (b) is replaced by the following:

credit rating agencies in that third country are subject to legally binding rules which are equivalent to those set out in Articles 6 to 12 and Annex I, with the exception of Articles 6a, 6b, 8a, 8b, 8c and 11a, point (ba) of point 3 and points 3a and 3b of Section B of Annex I; and’;

paragraph 8 is replaced by the following:

‘8. Articles 20, 23b and 24 shall apply to credit rating agencies certified in accordance with Article 5(3) and to credit ratings issued by them.’;

the following Articles are inserted in Title I:

REGULATION (EU) No 462/2013 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 21 May 2013 amending Regulation (EC) No 1060/2009 on credit rating agencies ANNEX I ANNEX II