June 6, 2011
Financial Services Agency

FSA and ESMA exchanged the letters regarding credit rating agencies

The Financial Services Agency (FSA) and the European Securities and Markets Authority (ESMA) exchanged the letters (EOL) regarding credit rating agencies on June 1, 2011.

The EOL is for the purpose of a mechanism for cooperation set out in Articles 4 and 5 of the EU Regulation (EC) No 1060/2009 on credit rating agencies.

The FSA also notes that due to this revision of the EU regulation, the ESMA becomes from 1 July 2011 exclusively responsible for the supervision of credit rating agencies in the European Union (EU). For this reason, a mechanism for cooperation between the FSA and the Autorité des marchés financiers (AMF) France, which was established by a similar EOL on December 3, 2010, is transferred to the one between the FSA and the ESMA.

According to the EU Regulation, ratings issued outside the EU can be used for regulatory purposes by regulated entities in the EU by means of either endorsement or certification. Both measures require “cooperation arrangement” between the competent authorities as set out in Articles 4 or 5 of the EU Regulation.