Wednesday, June 9, 2010

Equivalence between US and EU CRA regulatory regimes

Clifford Chance reports that "CESR has published its technical advice to the European Commission on the equivalence between the US Regulatory and Supervisory Framework and the EU Regulatory Regime for Credit Rating Agencies."

CESR concludes that, overall, the US legal and supervisory framework is broadly equivalent to the EU regulatory regime for credit rating agencies in terms of achieving what CESR considers to be the overall objective of 'assuring that users of ratings in the EU would benefit from equivalent protections in terms of the credit rating agencies' integrity, transparency, good governance and reliability of the credit rating activities'. However, CESR argues that there are a number of differences between the US legal and supervisory framework and the EU regulatory regime, which mainly relate to the issue of disclosure of credit ratings and the quality of credit ratings and credit rating methodologies. CESR recommends that the differences identified in its advice are addressed to allow for further convergence between both regimes, and considers that reducing the difference may be achieved by future regulatory amendments to the SEC's rules.

Download the report here:

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