Competent authorities shall verify that the methodology for assigning credit assessments is rigorous, systematic, continuous and subject to validation based on historical experience.

Competent authorities shall verify that the methodology is free from external political influences or constraints, and from economic pressures that may influence the credit assessment.

1. (a)

   ownership and organisation structure of the ECAI;

2. (b)

   financial resources of the ECAI;

3. (c)

   staffing and expertise of the ECAI; and

4. (d)

   corporate governance of the ECAI.

Competent authorities shall verify that ECAI's credit assessments are subject to ongoing review and shall be responsive to changes in the financial conditions. Such review shall take place after all significant events and at least annually.

1. (a)

   the back-testing must be established for at least one year;

2. (b)

   the regularity of the review process by the ECAI must be monitored by the competent authorities; and

3. (c)

   the competent authorities must be able to receive from the ECAI the extent of its contacts with the senior management of the entities which it rates.

Competent authorities shall take the necessary measures to be promptly informed by ECAIs of any material changes in the methodology they use for assigning credit assessments.

Competent authorities shall take the necessary measures to assure that the principles of the methodology employed by the ECAI for the formulation of its credit assessments are publicly available as to allow all potential users to decide whether they are derived in a reasonable way.