The European Commission has adopted a Communication setting out its approach to credit rating agencies (CRAs). After various financial scandals and the Resolution on CRAs adopted by the European Parliament in February 2004, calling on the Commission to produce an assessment of the need (if any) for legislative intervention in this field, the Commission considers that the time is right to report back to the Council and Parliament on this issue.
In line with advice received from the Committee of European Securities Regulators (CESR) in March 2005, the Commission will not present new legislative proposals in the area of CRAs. It is confident that the existing financial services Directives applicable to CRAs – combined with self-regulation by the CRAs on the basis of the newly adopted International Organisation of Securities Commissions (IOSCO) Code – will provide an answer to all the major issues of concern raised by the European Parliament.
The Commission will monitor developments in this area very carefully. It may consider introducing new proposals if it becomes clear that compliance with EU rules or the IOSCO Code is unsatisfactory or if new circumstances arise – including serious problems of market failure or fresh developments in other parts of the world.
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