As previously announced in its public statement (CESR 07-304), CESR is in the process of preparing its second annual report on the credit rating agencies’ (CRAs) compliance with the IOSCO Code of Conduct.
To this respect, CESR sent a letter to the 4 CRAS that have chosen to adhere to the voluntary framework requesting them to provide information on the changes introduced in their codes since the publication of CESR’s first annual report. In their responses to CESR (attached to the public statement), the CRAs informed that for the time being no changes have been made in their internal codes. However, some CRAs informed that they do intend to revisit their codes in the next several months taking into account not only CESR’s December 2006 report but also the new SEC NRSRO rules and the outcome of IOSCO’s consultation report on CRAs (that discusses potential areas for clarification of the IOSCO code).
Considering this information, the European Commision has agreed to CESR’s suggestion to set April 30th 2008 (instead of 31st December 2007) as new deadline for the preparation of CESR’s second annual report on CRAs, to allow CESR to assess the changes in the CRAs codes when they take place.
In the meantime CESR will work on other relevant sections of the report and specially on the analysis of rating process as regards structured finance instruments (e.g. quality of the rating process, conflicts of interests) as specifically requested by the European Commission in its letter to CESR (attached to the public statement).
