30.5.2012

EN

Official Journal of the European Union

L 140/1

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Notice concerning the entry into force of an Agreement on Trade in Bananas between the European Union and Brazil, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Peru and Venezuela

The Agreement on Trade in Bananas between the European Union and Brazil, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Peru and Venezuela, signed in Geneva on 31 May 2010 (1), has entered into force on 1 May 2012.

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(1)  OJ L 141, 9.6.2010, p. 3.

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30.5.2012

EN

Official Journal of the European Union

L 140/2

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COMMISSION DELEGATED REGULATION (EU) No 446/2012

of 21 March 2012

supplementing Regulation (EC) No 1060/2009 of the European Parliament and of the Council with regard to regulatory technical standards on the content and format of ratings data periodic reporting to be submitted to the European Securities and Markets Authority by credit rating agencies

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (1), and in particular point (e) of Article 21(4) thereof,

Whereas:

(1)

Point (e) of Article 21(4) of Regulation (EC) No 1060/2009 requires the European Securities and Markets Authority (ESMA) to submit by 2 January 2012 draft regulatory technical standards to be endorsed by the Commission concerning the content and format of the ratings data that credit ratings agencies should periodically report to ESMA. The purpose of this periodic reporting is to allow ESMA to discharge its responsibility with regard to the ongoing supervision of credit rating agencies, as established by Article 21(1) of that Regulation.

(2)

Ratings data should allow ESMA to supervise closely the conduct and activities of credit rating agencies, so as to be able to react promptly in case of actual or potential breaches of the requirements of Regulation (EC) No 1060/2009. For this reason, ratings data should normally be reported to ESMA on a monthly basis. However, in order to ensure proportionality, credit rating agencies that have fewer than 50 employees and that are not part of a group should be able to submit ratings data every two months, instead of every month. ESMA should still be able to require those credit ratings agencies to carry out monthly reporting, in light of the number and type of their ratings, including the complexity of the credit analysis, the relevance of the rated instruments or issuers and the eligibility of the ratings to be used for purposes such as those of Directive 2006/48/EC of the European Parliament and of the Council (2).

(3)

The data to be reported should be compiled in a standard format to allow ESMA to receive and process the records automatically in its internal systems. Due to technical progress over time, a number of technical reporting instructions concerning the transmission or the format of the files to be submitted by credit rating agencies may have to be updated and communicated by ESMA through specific communications or guidelines.

(4)

With a view to ensuring complete and correct reporting of ratings data, and to taking into account further developments in the financial markets, it is important to enable credit rating agencies to develop adequate systems and procedures following the technical specifications provided by ESMA. For this purpose, the Regulation shall only enter into force six months after its publication. Meanwhile, credit rating agencies should submit periodic ratings data in accordance with the existing guidelines issued by the Committee of European Securities Regulators.

(5)	Credit rating agencies that are part of a group should be able to either report their ratings data separately to ESMA, or mandate one of the other agencies within the group to submit the data on behalf of all group members that are subject to the reporting requirements.

(6)	This Regulation is based on the draft regulatory technical standards submitted by ESMA to the Commission, in accordance with Article 10 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council (3).

(7)

ESMA has conducted open public consultations on the draft regulatory technical standards on which this Regulation is based, analysed the potential related costs and benefits and requested the opinion of the Securities and Markets Stakeholder Group established in accordance with Article 37 of Regulation (EU) No 1095/2010,

HAS ADOPTED THIS REGULATION:

Article 1

Subject matter

This Regulation sets out the content and format of ratings data periodic reporting to be requested from credit rating agencies for the purpose of ongoing supervision by the European Securities and Markets Authority (‘ESMA’), in accordance with point (e) of Article 21(4) of Regulation (EC) No 1060/2009.

Article 2

Reporting principles

1.   Credit rating agencies shall comply with the requirements established by this Regulation and shall be responsible for the accuracy and completeness of the data reported to ESMA.

2.   In the case of a group of credit rating agencies, the members of the group may mandate one member to submit reports required under this Regulation on its behalf and on behalf of the other members of the group. Each credit rating agency on whose behalf a report is submitted shall be identified in the data submitted to ESMA.

3.   Reports submitted in accordance with this Regulation shall be submitted on a monthly basis and shall provide rating data relating to the preceding calendar month.

4.   Credit rating agencies that have fewer than 50 employees and that are not part of a group of credit rating agencies may submit, every two months, reports that provide rating data relating to the preceding two calendar months, unless ESMA informs the credit rating agency that it requires monthly reporting in view of the nature, complexity and range of issue of its credit ratings.

5.   Reports shall be submitted to ESMA within 15 days of the end of the period which is the subject of the report.

6.   Credit rating agencies shall notify ESMA immediately of any exceptional circumstances that may temporarily prevent or delay their ability to report in accordance with this Regulation.

Article 3

Data to be reported

1.   At the end of the first reporting period, a credit rating agency shall include in its reporting to ESMA the qualitative data specified in Table 1 of the Annex. Where those data change during a subsequent reporting period, the new data shall be submitted to ESMA.

2.   Credit rating agencies shall provide the data set out in Table 2 of the Annex for each action carried out by a credit rating agency as specified in that Table and for each credit rating concerned by that action. The actions to be reported shall refer to credit ratings issued or endorsed by the credit rating agency.

3.   Where no action as specified in Table 2 has occurred during a reporting period, the credit rating agency shall not be obliged to submit notification in this respect.

4.   The data specified in Table 1 and Table 2 of the Annex shall be submitted to ESMA in separate files. The qualitative data set out in Table 1 shall be submitted prior to the submission of the data set out in Table 2.

Article 4

Rating types

1.   A credit rating agency shall classify the ratings to be reported in accordance with the following types:

(a)	corporate ratings;

(b)	structured finance ratings;

(c)	sovereign and public finance ratings;

(d)	covered bond ratings.

2.   For the purpose of paragraph 1, structured finance ratings shall relate to a financial instrument or other assets resulting from a securitisation transaction or scheme referred to in Article 4(36) of Directive 2006/48/EC.

When reporting structured finance ratings, a credit rating agency shall classify the rating within one of the following asset classes:

(a)

Asset-backed securities. This asset class includes auto/boat/airplane loans, student loans, consumer loans, health care loans, manufactured housing loans, film loans, utility loans, equipment leases, credit card receivables, tax liens, non-performing loans, credit-linked notes, recreational vehicle loans, and trade receivables.

(b)	Residential mortgage-backed securities. This asset class includes prime and non-prime residential mortgage-backed securities and home equity loans.

(c)	Commercial mortgage-backed securities. This asset class includes retail or office property loans, hospital loans, care residences, storage facilities, hotel loans, nursing facilities, industrial loans, and multifamily properties.

(d)

Collateralised debt obligations. This asset class includes collateralised loan obligations, collateralised bond obligations, collateralised synthetic obligations, single-tranche collateralised debt obligations, collateralised fund obligations, collateralised debt obligations of asset-backed securities, and collateralised debt obligations of collateralised debt obligations.

(e)	Asset-backed commercial papers.

(f)	Other structured finance instruments that are not included in the preceding asset classes, including structured covered bonds, structured investment vehicles, insurance-linked securities and derivative product companies.

3.   Covered bond ratings shall relate to covered bonds which are not included in the list of asset classes regarding structured finance ratings set out in paragraph 2.

Article 5

Reporting procedures

1.   Credit rating agencies shall submit data files in accordance with the XML schemes provided by ESMA and using the reporting system established by ESMA. They shall name the files according to the naming convention indicated by ESMA.

2.   Credit rating agencies shall store the files sent to and received by ESMA in electronic form for at least five years. These files shall be made available to ESMA on request.

3.   Where a credit rating agency identifies factual errors in data that has been reported, it shall cancel and replace the relevant data.

4.   To cancel data a credit rating agency shall send to ESMA a file including the fields specified in Table 3 of the Annex. Once the original records have been cancelled, the credit rating agency shall send the new version of the records by using a file that includes the fields specified in Table 1 or Table 2, as appropriate.

Article 6

Entry into force

This Regulation shall enter into force six months following that of its publication in the Official Journal of the European Union.

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(1)  OJ L 302, 17.11.2009, p. 1.

(2)  OJ L 177, 30.6.2006, p. 1.

(3)  OJ L 331, 15.12.2010, p. 84.

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30.5.2012

EN

Official Journal of the European Union

L 140/14

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COMMISSION DELEGATED REGULATION (EU) No 447/2012

of 21 March 2012

supplementing Regulation (EC) No 1060/2009 of the European Parliament and of the Council on credit rating agencies by laying down regulatory technical standards for the assessment of compliance of credit rating methodologies

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (1), and in particular point (d) of Article 21(4) thereof,

Whereas:

(1)	Article 8(3) of Regulation (EC) No 1060/2009 requires a credit rating agency to use credit rating methodologies that are rigorous, systematic, continuous and subject to validation based on historical experience, including back-testing.

(2)

This Regulation is necessary to ensure transparency in the assessment carried out by the European Securities and Markets Authority (ESMA) established by Regulation (EU) No 1095/2010 of the European Parliament and the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (2) and uniform rules regarding the requirements set out in Article 8(3) of Regulation (EC) No 1060/2009.

(3)

ESMA has to assess the compliance of credit rating agencies with the provision of Article 8(3) of Regulation (EC) No 1060/2009 when examining applications for registration pursuant to Article 15 of that Regulation. After the registration ESMA should assess as part of its ongoing supervision the continuous compliance of credit rating agencies with the provision of Article 8(3) whenever it considers such assessment necessary.

(4)

Regulation (EC) No 1060/2009, in particular Article 23 thereof, does not permit ESMA, the Commission or any public authorities of a Member State to interfere with the content of credit ratings or methodologies. Accordingly, this Regulation should lay down the rules by which those methodologies are to be assessed but should not provide for those authorities to decide on the accuracy of a credit rating produced by those methodologies.

(5)

Article 6(2) when read in conjunction with point 9 of Section A of Annex I to Regulation (EC) No 1060/2009 requires a credit rating agency to establish a review function responsible for periodically reviewing its methodologies, models and key rating assumptions, such as mathematical or correlation assumptions, and any significant changes or modifications thereto as well as the appropriateness of those methodologies, models and key rating assumptions where they are used or intended to be used for the assessment of new financial instruments.

(6)	This Regulation is based on the draft regulatory technical standards submitted by ESMA to the Commission for endorsement by the Commission pursuant to the procedure laid down in Article 10 of Regulation (EU) No 1095/2010.

(7)

ESMA has conducted open public consultations on the draft regulatory technical standards on which this Regulation is based, analysed the potential related costs and benefits and requested the opinion of the Securities and Markets Stakeholder Group established under Article 37 of Regulation (EU) No 1095/2010. In addition, ESMA has launched a call for evidence in May 2011 in order to gather information from market participants,

HAS ADOPTED THIS REGULATION:

Article 1

Subject matter

This Regulation lays down the rules to be used in the assessment of compliance of credit rating methodologies with the requirements set out in Article 8(3) of Regulation (EC) No 1060/2009.

Article 2

Demonstration of compliance

A credit rating agency shall at all times be able to demonstrate to ESMA its compliance with the requirements set out in Article 8(3) of Regulation (EC) No 1060/2009 relating to the use of credit rating methodologies.

Article 3

Assessment of compliance by ESMA

1.   In addition to examining the compliance of credit rating agencies with the provision of Article 8(3) of Regulation (EC) No 1060/2009 in relation to an application for registration according to Article 15 of that Regulation, ESMA shall examine compliance by each credit rating agency with Article 8(3) of Regulation (EC) No 1060/2009 on an ongoing basis as ESMA considers appropriate.

2.   When examining the compliance of credit rating agencies with the provision of Article 8(3) of Regulation (EC) No 1060/2009 ESMA shall use all information relevant to assess the process of developing, approving, using and reviewing credit rating methodologies.

3.   In determining the appropriate level of assessment, ESMA shall consider whether a credit rating methodology has a demonstrable history of consistency and accuracy in predicting credit worthiness and may have regard to methods of validation such as appropriate default or transition studies designed to test that specific methodology.

Article 4

Assessing that a credit rating methodology is rigorous

1.   A credit rating agency shall use and apply credit rating methodologies which:

(a)	contain clear and robust controls and processes for their developments and related approvals that allow suitable challenge;

(b)	incorporate all driving factors deemed relevant in determining creditworthiness of a rated entity or a financial instrument which shall be supported by statistical, historical experience or evidence;

(c)	consider the modelled relationship between rated entities or financial instruments of the same risk factor and risk factors to which the credit rating methodologies are sensitive;

(d)	incorporate reliable, relevant and quality related analytical models, key credit rating assumptions and criteria where these are in place.

2.   A credit rating agency shall list and provide a detailed explanation of the following points with regard to the credit rating methodologies used regarding:

(a)	each qualitative factor, including the scope of qualitative judgement for that factor;

(b)	each quantitative factor, including key variables, data sources, key assumptions, modelling and quantitative techniques.

3.   The detailed explanation referred to in paragraph 2 shall include the following:

(a)	a statement of the importance of each qualitative or quantitative factor used within that credit rating methodology including, where relevant, a description of and justification for related weightings assigned to those factors and their impact on credit ratings;

(b)	an assessment of the relationship between the key assumptions used in that credit rating methodology and the critical risk factors derived from macroeconomic or financial data; and

(c)	an assessment of the relationship between the key assumptions used in credit rating methodology and the volatility of credit ratings produced by that methodology over time.

4.   A credit rating agency shall use credit rating methodologies and their associated analytical models, key credit rating assumptions and criteria that promptly incorporate findings or outcomes from an internal review or a monitoring review undertaken by one or more of the following:

(a)	the credit rating agency’s independent members of the administrative or supervisory board;

(b)	the credit rating agency’s review function;

(c)	any other relevant person or committee involved in the monitoring and reviewing of credit rating methodologies.

Article 5

Assessing that a credit rating methodology is systematic

1.   A credit rating agency shall use a credit rating methodology and its associated analytical models, key credit rating assumptions and criteria that are applied systematically in the formulation of all credit ratings in a given asset class or market segment unless there is an objective reason for diverging from it.

2.   A credit rating agency shall use a credit rating methodology which is capable of promptly incorporating the findings from any review of its appropriateness.

Article 6

Assessing that a credit rating methodology is continuous

A credit rating agency shall use credit rating methodologies shall that are designed and implemented in a way that enables them to:

(a)	continue to be used unless there is an objective reason for the credit rating methodology to change or be discontinued;

(b)	be capable of promptly incorporating any finding from ongoing monitoring or a review, in particular where changes in structural macroeconomic or financial market conditions would be capable of affecting credit ratings produced by that methodology;

(c)	compare credit ratings across different asset classes.

Article 7

Assessing that a credit rating methodology is subject to validation based on historical experience including back testing

1.   A credit rating agency shall use credit ratings methodologies that are supported by quantitative evidence of the discriminatory power of the credit rating methodology.

2.   A credit rating agency shall use credit rating methodologies that describe the following:

(a)	the historical robustness and predictive power of credit ratings issued using the relevant methodology over appropriate time horizons and across different asset classes;

(b)	the degree to which the assumptions used in the rating model deviate from the actual default and loss rates.

3.   The validation of a credit rating methodology shall be designed to:

(a)	examine the sensitivity of a credit rating methodology to changes in any of its underlying assumptions, including qualitative or quantitative factors;

(b)	perform an adequate and appropriate assessment of historic credit ratings produced by means of that credit rating methodology;

(c)	use reliable inputs, including appropriate size of the data samples;

(d)	take appropriate account of the main geographical areas of the rated entities or financial instruments for each of the credit rating categories rated such as structured finance, sovereign, corporates, financial institutions, insurances, public finance.

4.   A credit rating agency shall have processes in place to ensure that systemic credit rating anomalies highlighted by back-testing are identified and are appropriately addressed.

5.   In the process of reviewing credit rating methodologies, a credit rating agency shall include:

(a)	regular credit rating and performance reviews on rated entities and financial instruments;

(b)	in-sample and out-of-sample testing;

(c)	historic information on validation or back-testing.

Article 8

Exemption

In cases where there is limited quantitative evidence to support the predictive power of a credit rating methodology, a credit rating agency shall be exempt from complying with Article 7 of this Regulation if it:

(a)	ensures that credit rating methodologies are sensible predictors of credit worthiness;

(b)	applies internal procedures in a consistent way and over time and across different market segments;

(c)	has processes in place to ensure that systemic credit rating anomalies highlighted by back-testing are identified and are appropriately addressed.

Article 9

Entry into force

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

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(1)  OJ L 302, 17.11.2009, p. 1.

(2)  OJ L 331, 15.12.2010, p. 84.

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30.5.2012

EN

Official Journal of the European Union

L 140/17

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COMMISSION DELEGATED REGULATION (EU) No 448/2012

of 21 March 2012

supplementing Regulation (EC) No 1060/2009 of the European Parliament and of the Council with regard to regulatory technical standards for the presentation of the information that credit rating agencies shall make available in a central repository established by the European Securities and Markets Authority

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (1) and in particular Article 21(4)(c) thereof,

Whereas:

(1)

Article 11(2) of Regulation (EC) No 1060/2009 requires credit rating agencies to make certain information on historical performance data available in the central repository established by the European Securities and Markets Authority (hereinafter ‘ESMA’). This information is required to be provided in a standard form as provided for by ESMA and made available by ESMA to the public which shall also publish summary information on the main developments observed. These requirements need to be supplemented as regards the presentation of the information provided, including structure, format, method and period of reporting.

(2)

Credit rating agencies belonging to a group of credit rating agencies located in the Union may report separately to the central repository. However, due to the credit rating agencies’ highly integrated functional organisation at Union level and in order to facilitate the understanding of statistics, credit rating agencies should be encouraged to report to the central repository on a global basis for the whole group.

(3)

The central repository system collects data on credit ratings and stores them centrally. In order to help market participants to better assess the reliability of credit ratings and thereby assist them in taking investment decisions, the central repository should also accept on a voluntary basis credit ratings issued by third country credit rating agencies belonging to the same group of credit rating agencies but not endorsed in the Union.

(4)

To further facilitate the understanding of the statistics produced, the reporting of data on credit ratings should include any data relating to at least the last 10 years before the entry into force of Regulation (EC) No 1060/2009. A credit rating agency should not be required to report these data if it can demonstrate that this would not be proportionate in view of their scale and complexity.

(5)	This Regulation is based on the draft regulatory technical standards submitted by ESMA to the Commission for endorsement by the Commission pursuant to the procedure laid down in Article 10 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council (2).

(6)

ESMA has conducted an open public consultation on the draft regulatory technical standards on which this Regulation is based and requested the opinion of the Securities and Markets Stakeholder Group established in accordance with Article 37 of Regulation (EU) No 1095/2010. However, ESMA did not conduct a cost-benefit analysis since it considered this disproportionate to the impact of the draft regulatory technical standards given that the Committee of European Securities Regulators (CESR) had been establishing the central repository since 2010 and the draft technical standards reflected the operation of the existing system rather than applying material new requirements and was therefore not expected to impose significant additional costs on ESMA or credit rating agencies,

HAS ADOPTED THIS REGULATION:

CHAPTER I

GENERAL PROVISIONS

Article 1

Subject matter

This Regulation specifies the rules for the presentation of the information, including structure, format, method and period of reporting, that credit rating agencies are required to make available in a central repository in accordance with:

(a)	Article 11(2) of Regulation (EC) No 1060/2009;

(b)	point 1 of Part II of Section E of Annex I to Regulation (EC) No 1060/2009.

CHAPTER II

REPORTING STRUCTURE

Article 2

Reporting principles

1.   A credit rating agency shall submit the following types of report to the central repository established by ESMA:

(a)	qualitative data reports as set out in Article 7 and Article 9; and

(b)	rating data reports as set out in Article 8 and Article 10.

2.   A credit rating agency shall be responsible for the accuracy, completeness and availability of its reported data. It shall ensure that the reports are provided in due time using the reporting channels in Article 11 and according to the reporting procedure in Article 13.

3.   Where a credit rating agency belongs to a group of credit rating agencies the members of the group may mandate one of their members to report the required information on behalf of the group. When the mandated group member reports information on behalf of the group it shall identify both itself and the group members on whose behalf it is reporting the information.

Article 3

Ratings to be reported

1.   A credit rating agency shall report data on a credit rating for each reporting period until this credit rating is withdrawn.

2.   A credit rating agency shall report both solicited and unsolicited ratings. It shall indicate whether a rating is solicited or unsolicited.

3.   A credit rating agency reporting on behalf of a group of credit rating agencies may include data of third country credit rating agencies belonging to the same affiliated group which are not used in the Union by means of endorsement. Where a credit rating agency does not report such data it shall give an explanation in its qualitative data report.

4.   A credit rating agency shall report data on credit ratings covering at least the last 10 years before the entry into force of Regulation (EC) No 1060/2009. A credit rating agency that did not issue credit ratings prior to 7 December 1999 shall report data for the reporting periods following the first date on which it issued a credit rating. A credit rating agency is not required to report in respect of rating periods that predate its registration or certification under Regulation (EC) No 1060/2009 if it can demonstrate that reporting such data is not proportionate in view of its scale and complexity.

5.   A credit rating agency shall report the following types of ratings:

(a)	corporate ratings;

(b)	structured finance ratings;

(c)	sovereign and public finance ratings.

Article 4

Corporate ratings

1.   A credit rating agency shall report data concerning corporate ratings on an issuer basis.

2.   A credit rating agency may treat ratings of a subsidiary of an undertaking either as an individual rating or not. That credit rating agency shall explain the policy chosen.

3.   When reporting corporate ratings a credit rating agency shall classify the ratings within one of the industry segments specified in field 18 of Table 1 of Annex II.

4.   Corporate ratings data for short-term ratings and long-term ratings shall both be reported where available. For the long-term ratings the issuer rating shall be reported. Where an issuer rating is not available, the long-term unsecured debt rating shall be reported. Where foreign and local currency ratings are available, only the foreign currency rating shall be reported.

Article 5

Structured finance ratings

1.   Subject to the specific characteristics set out in paragraph 2 and 3, a credit rating agency shall report long-term ratings on an issue basis for structured finance instruments.

2.   A credit rating agency shall report long-term ratings on an issuer basis for structured investment vehicles and similar structures.

3.   A credit rating agency shall report short-term ratings on an issue basis for asset-backed commercial papers.

4.   When reporting structured finance ratings, a credit rating agency shall classify the ratings within one of the following asset classes:

(a)

Asset-backed securities. This asset class includes the sub-asset classes auto/boat/airplane loans, student loans, consumer loans, health care loans, manufactured housing loans, film loans, utility loans, equipment leases, credit card receivables, tax liens, non-performing loans, credit-linked notes, recreational vehicle loans, and trade receivables;

(b)	Residential mortgage-backed securities. This asset class includes the sub-asset classes prime residential mortgage-backed securities and non-prime residential mortgage-backed securities and home equity loans;

(c)	Commercial mortgage-backed securities. This asset class includes the sub-asset classes retail or office property loans, hospital loans, care residences, storage facilities, hotel loans, nursing facilities, industrial loans, and multifamily properties;

(d)

Collateralised debt obligations. This asset class includes the sub-asset classes collateralised loan obligations, collateralised bond obligations, collateralised synthetic obligations, single-tranche collateralised debt obligations, collateralised fund obligations, collateralised debt obligations of asset-backed securities, and collateralised debt obligations of collateralised debt obligations;

(e)	Asset-backed commercial papers;

(f)	Other structured finance instruments that are not included in the preceding asset classes, including structured covered bonds, structured investment vehicles, insurance-linked securities and derivative product companies.

5.   A credit rating agency shall specify which asset class and sub-asset class (where applicable) each rated instrument belongs to.

6.   For the purpose of field 17 of Table 1 of Annex II, the country code used for an instrument shall be that of the country of domicile of the majority of the underlying assets. Where it is not possible to identify the domicile of the majority of the underlying assets, the rated instrument shall be classified as ‘International.’

Article 6

Sovereign and public finance ratings

1.   A credit rating agency shall report data concerning sovereign and public finance ratings on an issuer basis. The credit rating agency shall classify the ratings within one of the following sectors:

(a)	local currency sovereign ratings;

(b)	foreign currency sovereign ratings;

(c)	sub-sovereign and municipalities ratings such as states and local governments;

(d)

supranational organisations’ ratings such as those of institutions established, owned and controlled by more than one sovereign government shareholder including organisations covered by code U (Activities of extraterritorial organisations and bodies) according to the statistical classification of economic activities in the European Communities (hereinafter ‘NACE’) (3);

(e)	public entities ratings including those covered by NACE codes O (Public administration and defence; compulsory social security), P (Education) and Q (Human health and social work activities).

2.   Within each sector the short-term and the long-term issuer ratings shall be reported. Where an issuer rating is not available, the long-term debt rating shall be reported.

3.   For the purpose of field 17 of Table 1 of Annex II, where no specific country can be identified as the country of issuance in the case of supranational organisations as specified in point (d) of paragraph (1), the rated issuer shall be classified as ‘International.’

CHAPTER III

FORMAT OF REPORTING

Article 7

Qualitative data

1.   A credit rating agency shall provide qualitative data reports in the format specified in Table 1 of Annex I. In particular, a credit rating agency shall provide qualitative data on its rating scale explaining the individual characteristics and the meaning of each rating. A credit rating agency may report up to six rating scales. No more than one rating scale may be reported in respect of any particular combination of time horizon and rating type.

2.   Where a credit rating agency issues ratings for a particular time horizon and rating type using more than one rating scale, it shall report in its qualitative data reports only the rating scale used for the numerical majority of such ratings. Ratings shall not be reported in rating data reports where they use a rating scale that has not been reported pursuant to this paragraph.

3.   A rating scale contains an undetermined number of broad rating categories that may include as subcategories an undetermined number of notches. A credit rating agency shall report both rating categories and notches where applicable.

Article 8

Rating data

1.   A credit rating agency shall provide rating data reports for ratings referred to in Article 3 in the format specified in Table 1 of Annex II.

2.   For the purpose of field 12 of Table 1 of Annex II, a credit rating agency shall report a default in respect of a rating where one of the following events has occurred:

(a)	the rating indicates that a default has occurred according to the credit rating agency’s definition of default;

(b)	the rating has been withdrawn due to insolvency of the rated entity or due to debt restructuring;

(c)	any other instance in which the credit rating agency considers a rated entity or rated instrument as defaulted, materially impaired or equivalent.

3.   All reported ratings that are withdrawn during a specific reporting period shall be accorded a reason for withdrawal under field 11 of Table 1 of Annex II. Ratings that were withdrawn before 7 September 2010 may be entered in the category ‘end of rating due to other reasons’.

Article 9

Changes to and cancellations of qualitative data

1.   A credit rating agency shall report changes to and cancellations of qualitative data reported where this is necessary to:

(a)	reflect changes in qualitative data;

(b)	correct factual errors in the reporting of a rating scale.

2.   For changes in qualitative data, except data on the rating scale, a credit rating agency shall send a new report containing the updated data. A credit rating agency shall only send a new qualitative data report if there is a change in any of the data, and only the data that have changed shall be reported. In the event of a methodology change, a credit rating agency shall report the updated qualitative data and may refer to additional information on historical methodology changes provided on its website.

3.   Where a change of a rating scale occurs limited to the labels of categories or notches a credit rating agency shall send the qualitative data report containing an updated record of the previous rating scale (identified by its unique rating identifier) modifying the labels or descriptions as appropriate. The other fields relating to the rating scale shall be included in the report with no changes. A credit rating agency shall use the fields specified in Table 1 of Annex I.

4.   Where a material change to a rating scale occurs, a credit rating agency shall declare a new rating scale and perform the following steps:

(a)	a qualitative file with an updated record of the previous rating scale modifying the end validity date to the date of the end of the previous reporting period shall be sent. The credit rating agency shall use the fields specified in Table 1 of Annex I;

(b)	the credit rating agency shall report the new rating scale with a new unique identifier and a start validity date of the first reporting period for which it is valid;

(c)	once the credit rating agency has received the feedback file from the central repository confirming that the new rating scale has been accepted, it shall send the rating data files corresponding to the first reporting period to which the new rating scale applies using the new rating scale.

5.   Where a rating scale is cancelled, a credit rating agency shall perform the following steps:

(a)	the cancellation shall take place before the credit rating agency reports any rating data to the central repository relating to that rating scale. In case rating data have already been reported, the credit rating agency has to cancel all rating data using the previous rating scale;

(b)	the credit rating agency shall send the qualitative data file containing the cancellation of the rating scale. The credit rating agency shall use the field specified in Table 2 of Annex I.

Article 10

Cancellation of rating data and historical reporting of rating data

1.   Where factual errors are identified in the rating data that has been reported, a credit rating agency shall report the cancellation of that rating data and shall replace the cancelled rating data.

2.   When cancelling rating data a credit rating agency shall take one of the following measures:

(a)	in case of a rating record of the current reporting period, a credit rating agency shall use the fields specified of Table 2 of Annex II. Once the original record has been cancelled, it shall send a new version of the record;

(b)

in case of a rating record of previous reporting periods, a credit rating agency may cancel the original rating data for all reported periods using the field specified of Table 2 of Annex II including the reason for the cancellation and then replace the original version of the record in all periods using the procedure described in Article 3(4).

3.   When reporting rating data retroactively, a credit rating agency shall add to the rating fields the historical reporting period of the rating and the reason for the reporting of historical rating data, as specified in fields 24 and 25 of Table 1 of Annex II.

CHAPTER IV

METHOD OF REPORTING

Article 11

Reporting channels and data transfer

1.   In order to report data to the central repository, a credit rating agency shall use the reporting facilities of the central repository system.

2.   All the files sent to and received from the central repository shall be in XML format compliant with the XSD schemes issued by ESMA.

3.   A credit rating agency shall name the files according to the naming convention issued by ESMA.

4.   A credit rating agency shall store the files sent to and received from the central repository in electronic form for at least five years. They shall be made available to ESMA on request.

Article 12

File exchange principles and reporting periods

1.   A credit rating agency shall send all files covering a specific reporting period within the subsequent pre-publication period to the central repository. This requirement covers both qualitative data files and rating data files.

2.   The reporting period shall cover a six-month period lasting from 1 January to 30 June or from 1 July to 31 December. The pre-publication period is a period of three months following the end of the respective reporting period, lasting from 1 January to 31 March or from 1 July to 30 September. The beginning and the end of a pre-publication period and a reporting period shall be determined by central European time.

3.   A credit rating agency shall first transmit qualitative data. It shall send rating data files only when it has received a feedback file from the central repository verifying the qualitative data.

4.   During each pre-publication period, a credit rating agency shall submit to the central repository rating data files including all the information as specified of Tables 1, 2 and 3 of Annex II. Cancellations of rating data shall be reported according to Article 10.

5.   The first time a credit rating agency reports to the central repository, it shall forward a qualitative data file including all qualitative data as specified of Tables 1, 2 and 3 of Annex I. Subsequently, that credit rating agency shall report only new rating scales, updates to and cancellations of qualitative data according to Article 9.

6.   In addition to its first report to the central repository a credit rating agency shall also report the historical data according to Article 3(4). That reporting shall be performed in a chronological order of the reporting periods, starting with the earliest one.

Article 13

Reporting procedure

1.   A credit rating agency shall ensure that the information sent to the central repository corresponds to its internal records. Within each pre-publication period all relevant files shall be sent in chronological order and errors shall be corrected within the pre-publication period.

2.   The central repository shall send a feedback file to the credit rating agency for each data file reported either confirming that the file has been received and loaded correctly or informing the credit rating agency about detected errors. Where the central repository has detected an error, the credit rating agency shall send corrections in due time as follows:

(a)	for file errors, the credit rating agency shall correct the error as indicated in the feedback file and resend the whole file again;

(b)	for content errors, the credit rating agency shall correct the error as indicated in the feedback file and shall resend only the corrected records.

CHAPTER V

FINAL PROVISIONS

Article 14

Entry into force

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

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(1)  OJ L 302, 17.11.2009, p. 1.

(2)  OJ L 331, 15.12.2010, p. 84.

(3)  Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006 establishing the statistical classification of economic activities NACE Revision 2 and amending Council Regulation (EEC) No 3037/90 as well as certain EC Regulations on specific statistical domains (OJ L 393, 30.12.2006, p. 1).

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30.5.2012

EN

Official Journal of the European Union

L 140/32

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COMMISSION DELEGATED REGULATION (EU) No 449/2012

of 21 March 2012

supplementing Regulation (EC) No 1060/2009 of the European Parliament and of the Council with regard to regulatory technical standards on information for registration and certification of credit rating agencies

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (1), and in particular points (a) and (b) of Article 21(4) thereof,

Whereas:

(1)

In accordance with the general objectives of Regulation (EC) No 1060/2009, in particular the contribution to the quality of credit ratings issued in the Union, financial stability, consumer and investor protection, this Regulation should ensure that the information to be submitted to the European Securities and Markets Authority (ESMA) during the registration and certification processes, is provided following uniform rules, so that ESMA is able to make an informed decision on the registration or certification of a credit rating agency.

(2)	The longer-term benefits of the additional information are expected to outweigh any potential additional short-term costs of registration, in terms of investor protection and financial stability.

(3)

This Regulation should set out the information that ESMA is to receive as part of an application for registration by a credit rating agency. Certain information requested in this Regulation might not be applicable to a newly established credit rating agency because it might have applied for an exemption, lack previous experience in the credit rating business, or other reasons. This Regulation should not create a barrier of entry to newly established credit rating agencies willing to enter the market. Nevertheless, an applicant should provide a clear explanation for not submitting any specific information contained in that application.

(4)	Any information submitted to ESMA should be provided in a durable medium which enables its storage for future use. In order to facilitate the identification of the information submitted by a credit rating agency, all documents should be identified by a reference number.

(5)

In order for ESMA to assess if any conflicts of interest arising from the activities and business interests of the owners of a credit rating agency might affect the independence of a credit rating agency, a credit rating agency should be required to give information regarding its owners activities and the ownership of its parent undertaking.

(6)

A credit rating agency should provide information on the composition, functioning and independence of its governing bodies in order for ESMA to be able to assess whether the corporate governance structure ensures the independence of the credit rating agency and the avoidance of conflicts of interest.

(7)	In order to allow ESMA to assess the good repute as well as the experience and skills of the senior management, a credit rating agency should provide the curriculum vitae, recent criminal record and self-declarations on the good repute of its senior management.

(8)

For the purposes of assessing how conflicts of interest are eliminated or managed and disclosed, a credit rating agency should provide ESMA with an up-to-date inventory of existing and potential conflicts of interest covering at least the conflicts arising from the carrying out of ancillary services, the outsourcing of rating activities and the interaction with related third parties. When identifying the conflicts of interest for the inventory, a credit rating agency should consider conflicts of interest which might arise from entities which belong to the global group of undertakings to which it belongs. Therefore, intra-group arrangements concerning allocation of tasks and the provision of ancillary services by different entities within the group of undertakings should be taken into consideration.

(9)

Although the branches of a credit rating agency established in the Union are not legal persons, those agencies should provide separate information as regards their branches so as to enable ESMA to clearly identify the position of the branches in the organisational structure, assess the fitness and appropriateness of the senior management of the branches and evaluate whether the control mechanisms, compliance and other functions in place, are considered to be robust enough to identify, evaluate and manage the branches’ risks in an appropriate manner.

(10)	The information requested regarding possible conflicts of interests with ancillary services should refer to all businesses of the credit rating agency which are not part of the rating activities.

(11)

In order to enable ESMA to assess whether a third-country regulatory framework for CRAs may be considered ‘as stringent as’ the Union regime in place, a credit rating agency intending to endorse ratings issued in that third country should provide ESMA with detailed information on the third-country regulatory framework and how it compares to the Union regime in place. Where such information is already available to ESMA, from other applications for endorsement, and ESMA takes the view that the third-country regulatory framework may be considered to be as stringent as the Union regime in place, the applicant credit rating agencies should be exempted from submitting this information. In any case, the applicant credit rating agencies shall demonstrate that the conduct of credit rating activities by the third-country credit rating agency resulting in the issuing of the credit rating to be endorsed fulfils the requirements under the third-country regime and that there are procedures to monitor the conduct of credit rating activities by the third-country credit rating agency.

(12)

This Regulation should set out the information that a credit rating agency must provide in its application for certification and for the assessment of its systemic importance to the financial stability or integrity of financial markets referred to in Article 5 of Regulation (EC) No 1060/2009. The systemic importance of the credit rating agency and its rating activities to the stability of one or more Member States should be measured in this Regulation in terms of the size of its rating activities and interconnectedness of the users of its credit ratings in the Union.

(13)	This Regulation is based on the draft regulatory technical standards submitted by ESMA to the Commission pursuant to the procedure laid down in Article 10 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council (2).

(14)

ESMA has conducted open public consultations on the draft regulatory technical standards on which this Regulation is based, analysed the potential related costs and benefits and requested the opinion of the Securities and Markets Stakeholder Group established under Article 37 of Regulation (EU) No 1095/2010,

HAS ADOPTED THIS REGULATION:

CHAPTER 1

SUBJECT MATTER

Article 1

Subject matter

This Regulation lays down the rules which determine the information to be provided to ESMA by a credit rating agency in its application for:

(a)	registration, as set out in Annex II to Regulation (EC) No 1060/2009; or

(b)	certification and for the assessment of its systemic importance to the financial stability or integrity of financial markets referred to in Article 5 of Regulation (EC) No 1060/2009.

CHAPTER 2

REGISTRATION

SECTION 1

General

Article 2

Format of the application

1.   An application for registration shall be provided in an instrument which stores information in a way accessible for future reference and which allows the unchanged reproduction of the information stored.

2.   A credit rating agency shall give a unique reference number to each document it submits. It shall ensure that the information it submits clearly identifies to which specific requirement of this Regulation it refers and in which document that information is provided. The credit rating agency shall submit the table set out in Annex I as part of its application to clearly identify the document in which information required under this Regulation is provided.

3.   If a requirement of this Regulation does not apply to a credit rating agency’s application, it shall state this in the table set out in Annex I and provide an explanation.

4.   Where a group of credit rating agencies applies for registration, the application shall clearly identify each credit rating agency to which the information applies. When the same information applies to more than one credit rating agency within the group of credit rating agencies, for the purpose of filling in the table of Annex I, the same reference number shall be given for the common information.

Article 3

Attestation of the accuracy and completeness of the application

Any information submitted to ESMA during the registration or certification process shall be accompanied by a letter signed by a member of the credit rating agency’s senior management or a representative authorised by the senior management, attesting that the submitted information is accurate and complete to the best of their knowledge, as of the date of that submission.

Article 4

Number of employees

Any information regarding the number of employees shall be provided on a full time equivalent basis calculated as the total hours worked divided by the maximum number of hours subject to compensation within a working year as defined by the relevant national law.

Article 5

Class of credit ratings

Any information regarding the class of credit ratings shall use the following ratings classes:

(a)	sovereign and public finance ratings;

(b)	structured finance ratings;

(c)	corporate ratings: (i) financial institution including credit institutions and investment firms; (ii) insurance undertaking; (iii) corporate issuer that is not considered a financial institution or an insurance undertaking.

Article 6

Policies and procedures

1.   Policies and procedures provided in an application shall contain or be accompanied by:

(a)	an indication of who is responsible for the approval and maintenance of the policies and procedures;

(b)	a description of how compliance with the policies and procedures will be enforced and monitored and who is responsible for this;

(c)	a description of the measures undertaken in the event of a breach of the policies;

(d)	an indication of the procedure for reporting to ESMA a material breach of the policy or procedure which may result in a breach of the conditions for initial registration or certification.

2.   A credit rating agency may fulfil the obligation to provide information regarding its policies and procedures under this Regulation by submitting a copy of the relevant policies and procedures.

Article 7

Identification, legal status and class of credit ratings

A credit rating agency shall provide ESMA with:

(a)	the information listed in Annex II to this Regulation;

(b)	an excerpt from the relevant commercial or court register, or other form of evidence of the place of incorporation and scope of business activity of the credit rating agency, as of the application date.

SECTION 2

Ownership structure

Article 8

Owners and parent undertaking of a credit rating agency

1.   A credit rating agency shall provide ESMA with:

(a)	a list of each person who directly or indirectly holds 5 % or more of the credit rating agency’s capital or of voting rights or whose holding makes it possible to exercise a significant influence over the management of the credit rating agency;

(b)	the information set out in points 1 and 2 of Annex III in relation to each such person.

2.   A credit rating agency shall also provide the following information to ESMA:

(a)	a list of any undertakings in which a person referred to in paragraph 1 holds 5 % or more of the capital or voting rights or over whose management that person exercises a significant influence;

(b)	an identification of their business activity referred to in point 3 of Annex III.

3.   Where a credit rating agency has a parent undertaking, it shall:

(a)	identify the country where the parent undertaking is established;

(b)	indicate whether the parent undertaking is authorised or registered and subject to supervision.

Article 9

Ownership chart

A credit rating agency shall provide ESMA with a chart showing the ownership links between any parent undertaking, subsidiaries and any other associated entities established in the Union and their branches. The undertakings shown in the chart shall be identified by their full name, legal status and address of the registered office and head office.

SECTION 3

Organisational structure and corporate governance

Article 10

Organisational chart

A credit rating agency shall provide ESMA with an organisational chart detailing its organisational structure, including a clear identification of significant roles and the identity of the person responsible for each significant role. Significant roles shall include at least senior management, persons who direct the activities of the branches and senior rating analysts. Where the credit rating agency conducts ancillary services, the organisational chart shall also detail its organisational structure in respect of those services.

Article 11

Organisational structure

1.   A credit rating agency shall provide to ESMA information regarding its policies and procedures in relation to its compliance function as set out in point 5 of Section A of Annex I to Regulation (EC) No 1060/2009, review function as set out in point 9 of Section A of Annex I to Regulation (EC) No 1060/2009 and information regarding its policies and procedures established to meet the requirements set out in points 4 and 10 of Section A of Annex I to Regulation (EC) No 1060/2009.

The information provided under this paragraph shall include the information set out in Annex IV points 1, 3 and 4.

2.   Where the policies and procedures referred to in paragraph 1 are carried out at group of undertakings level, a credit rating agency shall also provide ESMA with the information set out in Annex IV point 2.

3.   A credit rating agency shall also provide ESMA with the information set out in Annex X.

Article 12

Corporate governance

1.   A credit rating agency shall provide ESMA with information regarding its internal corporate governance policies and the procedures and terms of reference which govern its senior management, including the administrative or supervisory board, its independent members and, where established, committees.

2.   Where a credit rating agency adheres to a recognised corporate governance code of conduct, it shall identify the code and provide an explanation for any situations where it deviates from the code.

3.   A credit rating agency shall provide the information set out in points 1 and 2 of Annex V on the members of its administrative or supervisory board.

4.   A credit rating agency shall provide ESMA with a copy of the documents referred to in point 3 of Annex V.

SECTION 4

Financial resources for the performance of credit rating activities

Article 13

Financial reports

1.   A credit rating agency shall provide ESMA with a copy of its annual financial reports, including individual and consolidated financial statements where applicable, for the three financial years preceding the date of the submission of its application to the extent available. Where the financial statements of the credit rating agency are subject to statutory audit within the meaning given in Article 2(1) of Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts (3), the financial reports shall include the audit report on the annual and consolidated financial statement.

2.   Where the financial reports referred to in paragraph 1 are not available for the requested period of time, a credit rating agency shall provide ESMA with an interim financial report.

3.   Where the credit rating agency is a subsidiary of a group of undertakings, it shall provide the annual financial reports of the parent undertaking for the three financial years preceding the date of the submission of its application.

4.   A credit rating agency shall provide ESMA with a description of the measures it has adopted to ensure sound accounting procedure.

SECTION 5

Staffing and compensation

Article 14

Staffing policies and procedures

1.   A credit rating agency shall provide ESMA with information regarding the following policies and procedures:

(a)

reporting to the compliance officer of any situations where one of the persons referred to in point 1 of Section C of Annex I to Regulation (EC) No 1060/2009 considers that any other such person has engaged in conduct that he or she considers illegal, pursuant to the provisions of point 5 of Section C of Annex I to Regulation (EC) No 1060/2009;

(b)	the rotation of lead rating analysts, rating analysts and persons approving credit rating;

(c)	the compensation and performance evaluation practices for rating analysts, persons approving credit ratings, senior management and the compliance officer;

(d)	the training and development relevant to the rating process, including any examination or other type of formal assessment required for the conduct of rating activities.

2.   A credit rating agency shall also provide ESMA with:

(a)	a description of the measures in place to mitigate the risk of over-reliance on individual employees;

(b)	for each class of credit ratings, information on the size and experience of the quantitative teams responsible for developing and reviewing methodologies and models;

(c)	the name and function of any employee of the credit rating agency who has obligations, either individually or on behalf of the credit rating agency, to any other entity within the group of credit rating agencies;

(d)	the average annual fixed and variable remuneration of the rating analysts, lead analysts and the compliance officer for each of the preceding three financial years.

3.   A credit rating agency shall describe the arrangements in place to ensure that it is informed when a rating analyst terminates his or her employment and joins a rated entity as set out in point 6 of Section C of Annex I to Regulation (EC) No 1060/2009. A credit rating agency shall describe the arrangements in place to ensure that the persons referred in point 1 of Section C of Annex I to Regulation (EC) No 1060/2009 are aware of the prohibition established as set out in point 7 of Section C of Annex I to Regulation (EC) No 1060/2009.

Article 15

Fitness and appropriateness

1.   A credit rating agency shall provide ESMA with the curriculum vitae, including employment history with relevant dates, identification of positions held and a description of the functions occupied, for each of the following:

(a)	members of senior management;

(b)	persons appointed to direct the business of the branches;

(c)	officers responsible for internal audit, internal control, compliance function, risk assessment and review function.

2.   A credit rating agency shall provide ESMA with the following information in respect of each member of its senior management:

(a)	a recent criminal-record file from the country of origin of the relevant person, unless the relevant national authorities do not issue such a file;

(b)	a self-declaration of their good repute including at least the statements set out in Annex VI and signed by the individual.

SECTION 6

Issuance and review of credit ratings

Article 16

Development, validation, review and disclosure of rating methodologies

1.   A credit rating agency shall provide ESMA, for each class of credit rating, with a high-level description of the range of core models and methodologies used to determine credit ratings.

2.   A credit rating agency shall provide ESMA with the following information regarding its policies and procedures:

(a)	information regarding the development, validation and review of its rating methodologies, including at least the information set out in point 1 of Annex VII;

(b)	information regarding the disclosure of the credit methodologies and descriptions of models and key rating assumptions used in its credit rating activities as set out in point 5 of Part I of Section E of Annex I to Regulation (EC) No 1060/2009.

Article 17

Issuance of credit ratings

1.   A credit rating agency shall provide ESMA with the following information:

(a)	the rating nomenclatures used for each class of credit rating;

(b)	the definition of any rating action and statuses used by the credit rating agency;

(c)	its policies and procedures regarding the issuance of credit ratings, including at least the information set out in point 2 of Annex VII;

(d)	the terms of reference of any rating committees;

(e)	a description of the arrangements in place for disclosing a rating decision, including at least the information set out in point 3 of Annex VII;

(f)	a description of the procedures in place to ensure that a methodology is applied and implemented consistently across classes of credit rating, offices and regions.

2.   A credit rating agency shall identify any differences between the treatment of unsolicited and solicited ratings in the policies and procedures provided under points (c) and (e) of paragraph 1.

3.   Where the rating process is regularly audited by an independent third party, a credit rating agency shall provide ESMA with the last audit report.

4.   A credit rating agency shall also provide ESMA with the following information:

(a)	details and criteria for the selection of data providers;

(b)	details on the reliability of internal and external data input into rating models;

(c)	details of the data sources used.

Article 18

Monitoring of credit ratings

A credit rating agency shall provide ESMA with information regarding its policies and procedures concerning:

(a)	the monitoring of ratings, identifying any differences between solicited and unsolicited ratings, and including at least the information set out in point 4 of Annex VII;

(b)	the disclosure of the decision to review or change a rating;

(c)	the monitoring of the impact of changes in macroeconomic or financial market conditions on credit ratings as described in Article 8(5) of Regulation (EC) No 1060/2009.

SECTION 7

Description of issue and review procedures and methodologies

Article 19

Credit rating presentation requirements

A credit rating agency shall provide ESMA with information regarding the following items:

(a)	policies and procedures with respect to the credit rating disclosure requirements laid down in the following provisions of Regulation (EC) No 1060/2009: (i) paragraphs 1, 2 and 5 of Article 10; (ii) Part I of Section D of Annex 1;

(b)	where the credit rating agency rates structured instruments, policies and procedures with respect to the following provisions of Regulation (EC) No 1060/2009: (i) Article 10(3); (ii) point 4 of Section B of Annex I; (iii) Part II of Section D of Annex I;

(c)	samples of typical credit rating reports or other documents demonstrating how the credit rating agency meets or intends to meet these disclosure requirements; and

(d)	samples of typical rating letters for each class of credit rating produced by the credit rating agency.

SECTION 8

Conflicts of interest

Article 20

Independence and avoidance of conflicts of interest

1.   A credit rating agency shall provide ESMA with information regarding its policies and procedures with respect to the identification, management and disclosure of conflicts of interest and the rules on rating analysts and other persons directly involved in credit rating activities covering at least the requirements set out in Annex VIII.

2.   A credit rating agency shall describe the process used to ensure that the relevant persons are aware of the policies and procedures referred to in paragraph 1. A credit rating agency shall describe the arrangements in place to ensure that the review function responsible for reviewing the methodologies set out in point 9 of Section A of Annex I to Regulation (EC) No 1060/2009 is independent of the business lines which are responsible for credit rating activities.

3.   A credit rating agency shall describe the controls put in place, including the controls implemented through information systems, in order to comply with the requirements of paragraphs (2) and (3) of Article 7 of Regulation (EC) No 1060/2009 on the negotiation of fees and the rules on persons involved in rating activities.

4.   A credit rating agency shall describe any other measures and controls put in place to ensure the independence of its rating analysts.

Article 21

Inventory of conflicts of interest

1.   A credit rating agency shall provide ESMA with an up-to-date inventory of existing and potential conflicts of interest relevant to it. Where a credit rating agency is part of a group of undertakings, it shall include in the inventory any conflicts of interest arising from other entities which belong to its group of undertakings.

2.   The inventory of existing and potential conflicts of interest shall identify the following potential conflicts of interest:

(a)	any potential conflicts of interest with related third parties;

(b)	any potential conflicts of interest arising from the carrying out of ancillary services and the outsourced rating activities;

3.   The inventory referred to in paragraph 1 shall explain how the potential conflicts of interest are to be eliminated or managed and disclosed.

Article 22

Conflicts of interest with respect to ancillary services

1.   A credit rating agency shall provide ESMA with a description of the resources, both human and technical, shared by the rating and ancillary services of the credit rating agency or shared with the group of undertakings to which it belongs.

2.   A credit rating agency shall describe the arrangements in place to prevent, disclose and mitigate any existing or potential conflicts of interest between the rating business and ancillary services.

3.   A credit rating agency shall provide ESMA with a copy of the results of any internal assessment performed to identify any existing or potential conflict of interest between the rating business and ancillary services.

SECTION 9

Programme of operations

Article 23

Information regarding the programme of operations

A credit rating agency shall provide ESMA with the annual information described in Annex IX covering a period of three years following the date of registration.

SECTION 10

Use of endorsement

Article 24

Expected use of endorsement

Where a credit rating agency intends to endorse credit ratings issued in third countries as set out in Article 4(3) of Regulation (EC) No 1060/2009, it shall provide ESMA with the information set out in Annex XI.

SECTION 11

Outsourcing

Article 25

Outsourcing requirements

1.   Where a credit rating agency outsources any important operational functions, it shall provide ESMA with the following information:

(a)	its policies with respect to outsourcing;

(b)	an explanation on how it intends to identify, manage and monitor the risks posed by the outsourcing of important operational functions;

(c)	a copy of the outsourcing agreements between the credit rating agency and the entity to which the activities are outsourced;

(d)	a copy of any internal or external report on the outsourced activities issued in the past five years.

2.   For the purposes of paragraph 1, important operational functions shall comprise rating review, lead analyst, rating methodology development and review, rating approval, internal quality control, data storage, IT systems, IT support and accounting.

CHAPTER 3

CERTIFICATION

SECTION 1

Application for certification

Article 26

Information for application for certification

1.   A credit rating agency shall provide ESMA with the following information:

(a)	the general information requested in points 1 to 10 of Annex II;

(b)	the information regarding its owners referred to in Article 8;

(c)	the organisational chart referred to in Article 10;

(d)	details on the arrangements in place to prevent, disclose and mitigate any existing or potential conflicts of interest between the rating business and ancillary services;

(e)	the information referred to in Article 13 regarding the credit rating agency’s financial resources.

2.   A credit rating agency shall provide ESMA with the following information regarding its business activities:

(a)	for the preceding three years, the number of employees contracted and involved in the rating and ancillary services both permanent and temporary;

(b)	if the applicant has a branch, the number of employees involved in the rating and ancillary business in each branch;

(c)	the number of rating analysts contracted to the applicant including, if the credit rating agency has a branch, the number of rating analysts contracted in each branch;

(d)	if a credit rating agency is planning to establish a new branch, a description of the type of business activities the new branch is expected to conduct, its full name and address and the timeframe for its establishment;

(e)	if a credit rating agency is planning to conduct any new ancillary services, a description of the new services and the timeframe for their commencement;

(f)	the revenue generated over the past three years by the credit rating agency from rating and ancillary services as a proportion of total revenue, presented on a financial year basis;

(g)	if the credit rating agency has one or more branches, the revenue generated over the past three years by each branch as a proportion of total revenue, presented on a financial year basis.

3.   A credit rating agency shall also provide ESMA with the following information regarding the credit ratings it issues or proposes to issue:

(a)	the class of credit ratings;

(b)	the rating nomenclatures used for each class of credit rating;

(c)	the definition of any rating action and statuses used by the credit rating agency;

(d)	details of whether the credit rating agency produces solicited or unsolicited ratings or both;

(e)	for each class of credit rating, the number of years of experience it has in producing these ratings;

(f)	for each class of credit rating, the current or expected proportion of public ratings and private ratings.

4.   The credit rating agency shall indicate whether it currently holds, or expects to apply for, External Credit Assessment Institution (ECAI) status in one or more Member States and, if so, it shall identify the relevant Member State.

Article 27

General requirements for the application for certification

A credit rating agency shall ensure that its application complies with Articles 2 to 6 regarding the format of its application, the attestation of its accuracy, the class of credit ratings, number of employees and the policies and procedures provided to ESMA.

SECTION 2

Systemic importance

Article 28

Systemic importance

A credit rating agency shall provide ESMA with the information set out in Annex XII regarding the systemic importance of its credit ratings and credit rating activities to the financial stability or integrity of the financial markets of one or more Member States.

CHAPTER 4

FINAL PROVISIONS

Article 29

Entry into force

This Regulation shall enter into force on the 20th day following its publication in the Official Journal of the European Union.

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(1)  OJ L 302, 17.11.2009, p. 1.

(2)  OJ L 331, 15.12.2010, p. 84.

(3)  OJ L 157, 9.6.2006, p. 87.

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30.5.2012

EN

Official Journal of the European Union

L 140/53

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COMMISSION IMPLEMENTING REGULATION (EU) No 450/2012

of 29 May 2012

amending Implementing Regulation (EU) No 543/2011 as regards the trigger levels for additional duties on tomatoes, apricots, lemons, plums, peaches, including nectarines, pears and table grapes

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Council Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (‘Single CMO’ Regulation) (1), and in particular Article 143(b) in conjunction with Article 4 thereof,

Whereas:

(1)

Commission Implementing Regulation (EU) No 543/2011 of 7 June 2011 laying down detailed rules for the application of Council Regulation (EC) No 1234/2007 in respect of the fruit and vegetables and processed fruit and vegetables sectors (2) provides for the surveillance of the imports of the products listed in Annex XVIII thereto. That surveillance is to be carried out in accordance with the rules laid down in Article 308d of Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code (3).

(2)

For the purposes of Article 5(4) of the Agreement on Agriculture (4) concluded during the Uruguay Round of multilateral trade negotiations and in the light of the latest data available for 2009, 2010 and 2011, the trigger levels for additional duties on tomatoes, apricots, lemons, plums, peaches, including nectarines, pears and table grapes should be amended with effect from 1 June 2012.

(3)	Implementing Regulation (EU) No 543/2011 should therefore be amended accordingly.

(4)	Given the need to ensure that this measure applies as soon as possible after the updated data have been made available, this Regulation should enter into force on the day of its publication.

(5)	The measures provided for in this Regulation are in accordance with the opinion of the Management Committee for the Common Organisation of Agricultural Markets,

HAS ADOPTED THIS REGULATION:

Article 1

Annex XVIII to Implementing Regulation (EU) No 543/2011 is replaced by the text set out in the Annex to this Regulation.

Article 2

This Regulation shall enter into force on the day of its publication in the Official Journal of the European Union.

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(1)  OJ L 299, 16.11.2007, p. 1.

(2)  OJ L 157, 15.6.2011, p. 1.

(3)  OJ L 253, 11.10.1993, p. 1.

(4)  OJ L 336, 23.12.1994, p. 22.

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30.5.2012

EN

Official Journal of the European Union

L 140/55

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COMMISSION IMPLEMENTING REGULATION (EU) No 451/2012

of 29 May 2012

on the withdrawal from the market of certain feed additives belonging to the functional group of silage additives

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EC) No 1831/2003 of the European Parliament and of the Council of 22 September 2003 on additives for use in animal nutrition (1), and in particular Article 10(5) thereof,

Whereas:

(1)

Regulation (EC) No 1831/2003 provides for the authorisation of additives for use in animal nutrition and for the grounds and procedures for granting such authorisation. Article 10(7) of Regulation (EC) No 1831/2003 in conjunction with Article 10(1) to (4) thereof sets out specific provisions for the evaluation of products used in the Union as silage additives at the date that Regulation became applicable.

(2)	The feed additives set out in the Annex were entered in the Community Register of Feed Additives as existing products, in accordance with Article 10(1) of Regulation (EC) No 1831/2003.

(3)

As regards the use of those feed additives as silage additives, no application for authorisation in accordance with Article 10(7) in conjunction with Article 10(2) of Regulation (EC) No 1831/2003 was submitted before the deadline provided for in Article 10(7). As regards the additive hexamethylene tetramine for certain species of animals, no application for authorisation was submitted before that deadline.

(4)	For transparency purpose, the additives for which no application for authorisation was submitted within the period specified in Article 10(7) of Regulation (EC) No 1831/2003 were listed in a separated part of the Community Register of Feed Additives.

(5)

Those feed additives should therefore be withdrawn from the market as far as their use as silage additives is concerned, except for species for which applications for authorisation have been submitted. This measure does not interfere with the use of some of the abovementioned additives according to other categories or functional groups for which they may be allowed.

(6)	Since the withdrawal of the silage additives concerned are not related to safety reasons, it is appropriate to allow a transitional period within which existing stocks of those additives as well as premixtures and silage which have been produced with those additives may be used up.

(7)	The withdrawal of the feed additives listed in the Annex should be considered as without prejudice to a possible future granting of an authorisation concerning them or to the adoption of a measure on their status on the grounds and under the procedures set out in Regulation (EC) No 1831/2003.

(8)	The measures provided for in this Regulation are in accordance with the opinion of the Standing Committee on the Food Chain and Animal Health,

HAS ADOPTED THIS REGULATION:

Article 1

Withdrawal

The feed additives specified in Part A of the Annex, belonging to the functional group ‘silage additives’ within the category ‘technological additives’, shall be withdrawn from the market.

The feed additive specified in Part B of the Annex, belonging to the functional group ‘silage additives’ within the category ‘technological additives’, shall be withdrawn from the market in respect of the species of animals mentioned in that Part of the Annex.

Article 2

Transitional measures

1.   Existing stocks of the feed additives set out in Part A of the Annex may continue to be placed on the market and used as feed additives belonging to the functional group ‘silage additives’ within the category ‘technological additives’ until 19 June 2013.

2.   Premixtures produced with the additives referred to in paragraph 1 may continue to be placed on the market and used until 19 June 2013.

3.   Silage produced with the additives referred to in paragraph 1 or with the premixtures referred to in paragraph 2 may continue to be placed on the market and used until 19 June 2014.

4.   As regards the feed additive set out in Part B of the Annex, paragraphs 1, 2 and 3 shall apply in respect of the species of animals mentioned in that Part of the Annex.

Article 3

Entry into force

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

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(1)  OJ L 268, 18.10.2003, p. 29.

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