Credit rating agencies—international standards

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Credit rating agencies—international standards
  • IOSCO standards
  • IOSCO Statement of Principles
  • IOSCO Code of Conduct
  • Implementation of IOSCO standards by CRAs
  • CRAs' internal controls and procedures
  • Supervisory colleges for CRAs
  • Reducing reliance on CRAs in asset management
  • Other CRA products
  • FSB standards for the use of credit ratings
  • More...

Credit rating agencies—international standards

IOSCO standards

For general information on the International Organization of Securities Commissions (IOSCO), see Practice Note: International Organization of Securities Commissions (IOSCO).

The key document produced by IOSCO to set regulatory standards for credit rating agencies (CRAs) is the Statement of Principles regarding the activities of Credit Rating Agencies first published on 25 September 2003 (the Statement of Principles). IOSCO has also published a Code of Conduct Fundamentals for Credit Rating Agencies (the Code of Conduct), first published in December 2004 and most recently revised in March 2015. CRAs are required to take IOSCO's Statement of Principles and Code of Conduct into account as part of their activities and national regulators are required to reflect the standards in regulatory requirements and guidance.

The Code of Conduct provides the following definitions of a 'credit rating' and a 'credit rating agency':

  1. Credit rating—an opinion regarding the creditworthiness of an entity, a credit commitment, a debt or debt-like security or an issuer of such obligations expressed using an established and defined ranking system. Credit ratings are not recommendations to purchase, sell or hold any entity

  2. Credit rating agencies—entities whose business is the issuance of credit ratings for the purposes of evaluating the credit risk of issuers of debt and debt-like securities

IOSCO Statement of Principles

The Statement of Principles is designed to set a standard of principles that CRAs,

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