CHAPTER 2

REGISTRATION
SECTION 6

Issuance and review of credit ratings

Development, validation, review and disclosure of rating methodologies
Article 16
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.

Issuance of credit ratings
Article 17
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.

Monitoring of credit ratings
Article 18
A credit rating agency shall provide ESMA with information regarding its policies and procedures concerning:
1. 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;
2. the disclosure of the decision to review or change a rating;
3. 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.