33 Amendments of Emilie TURUNEN related to 2011/0361(COD)
Amendment 47 #
Proposal for a regulation
Recital 3 a (new)
Recital 3 a (new)
(3a) Credit ratings and rating outlooks should be expressed in numbers indicating the probability of default, accompanied by an explanatory statement.
Amendment 55 #
Proposal for a regulation
Recital 5 a (new)
Recital 5 a (new)
(5a) Given the high return on sales credit rating agencies with a market share of more than 10 % benefit from, Member States should coordinate the introduction of a special tax, the revenue of which could contribute to funding alternative rating models.
Amendment 143 #
Proposal for a regulation
Recital 19
Recital 19
(19) It is important to ensure that modifications to the rating methodologies do not result in less rigorous methodologies. For that purpose, issuers, investors and other interested parties should have the opportunity to comment on any intended change of rating methodologies. This will help them to understand the reasons behind new methodologies and for the change in question. Comments provided by issuers and investors on the draft methodologies may provide valuable input for the credit rating agencies in defining the methodologies. Moreover, ESMA should verify and confirm the compliance of new rating methodologies with Article 8(3) of Regulation (EC) No 1060/2009 and the relevant regulatory technical standard before methodologies are applied in practice. ESMA should verify that the proposed methodologies are rigorous, systematic, continuous and subject to validation based on historical experience, including back-testing. However, this verification process should not grant ESMA any power to judge the appropriateness of the proposed methodology or the content of the credit ratings issued following the application of the methodologies, and in this way standardisation of methodologies is avoided and the diversity of methodologies maintained.
Amendment 145 #
Proposal for a regulation
Recital 19 a (new)
Recital 19 a (new)
(19a) Rating methodologies should take into account financial risks deriving from environmental hazards. Such risks include, but are not limited, to the risk to the long terms creditworthiness of obligors with significant exposure to environmental factors or changes in legal requirements relating to environmental matters, the impact of environmental matters on commodity price exposures and the impact of non-insurable risks not already taken into account in the institutions regulatory and internal operational risk framework.
Amendment 211 #
Proposal for a regulation
Article 1 – point 6
Article 1 – point 6
Regulation (EC) No 1060/2009
Article 5a
Article 5a
Credit institutions, investment firms, insurance and reinsurance undertakings, institutions for occupational retirement provisions, management and investment companies, alternative investment fund managers and central counterparties as defined in Regulation (EU) No xx/201x of the European Parliament and of the Council of xx xxx 201x on OTC derivatives, central counterparties and trade repositories shall make their own credit risk assessment and shall noteither solely nor mechanistically rely on credit ratings for assessing the creditworthiness of an entity or financial instrument. An external credit rating shall only be used if the undertakings referred to in the first paragraph have a balance sheet of less than 2,5 billion euro and demonstrated that they are unable to assess the credit risk by other means or where they can demonstrate to the satisfaction of the competent authority that the burden of an internal assessment is not justified by the materiality of the current and expected future exposure resulting from the assets concerned. Competent authorities in charge of supervising these undertakings shall closely checkmonitor the adequacy of undertakings credit assessment processes. and ensure that they agree neither to contractual rules that result in the automatic sale of assets in the event of a downgrade of the creditworthiness by an external credit rating agency, nor to a rule requiring the use of a specific credit rating agency.
Amendment 215 #
Proposal for a regulation
Article 1 – point 6
Article 1 – point 6
Regulation (EC) No 1060/2009
Article 5b – title
Article 5b – title
Reliance on credit ratings by the ECB, the European Supervisory Authorities and the European Systemic Risk Board
Amendment 223 #
Proposal for a regulation
Article 1 – point 6
Article 1 – point 6
Regulation (EC) No 1060/2009
Article 5 c (new)
Article 5 c (new)
Article 5c Reliance on credit ratings by the ECB The ECB shall not refer to or rely on credit ratings in any way.
Amendment 233 #
Proposal for a regulation
Article 1 – point 8
Article 1 – point 8
Regulation (EC) No 1060/2009
Article 6a – paragraph 1 – introductory part
Article 6a – paragraph 1 – introductory part
1. A shareholder or a member of a credit rating agency holding at least 5% of theny capital or the voting rights in that agency shall not:
Amendment 235 #
Proposal for a regulation
Article 1 – point 8
Article 1 – point 8
Regulation (EC) No 1060/2009
Article 6a – paragraph 1 – point a
Article 6a – paragraph 1 – point a
(a) hold 5% or moreany of the capital of any other credit rating agency. This prohibition does not apply to holdings in diversified collective investment schemes, including managed funds such as pension funds or life insurance, provided that the holdings in diversified collective investment schemes do not put him or her in a position to exercise significant influence on the business activities of those schemes;
Amendment 238 #
Proposal for a regulation
Article 1 – point 8
Article 1 – point 8
Regulation (EC) No 1060/2009
Article 6a – paragraph1 – point b
Article 6a – paragraph1 – point b
(b) have the right or the power to exercise 5% or moreany of the voting rights in any other credit rating agency;
Amendment 251 #
Proposal for a regulation
Article 1 – point 8
Article 1 – point 8
Regulation (EC) No 1060/2009
Article 6b – paragraph 1
Article 6b – paragraph 1
1. Where a credit rating agency has entered into a contract with an issuer or its related third party for the issuing of credit ratings on that issuer, it shall not issue credit ratings on that issuer for a period exceeding threfive years.
Amendment 253 #
Proposal for a regulation
Article 1 – point 8
Article 1 – point 8
Regulation (EC) No 1060/2009
Article 6b – paragraph 2
Article 6b – paragraph 2
2. Where a credit rating agency has entered into a contract with an issuer or its related third party for the issuing of credit ratings on the debt instruments of that issuer, the following shall apply: (a) when those credit ratings are issued within a period exceeding an initial period of twelve months but shorter than three years, theand when that credit rating agency shall not issue any furthers issued credit ratings oin those debt instruments from the moment that ten debt instruments have been rated; (b) when at least ten credit ratings are issued within an initial period of twelve months, that credit rating agency shall not issue any further credit ratings on those debt instruments after the end of that period; (c) when less than ten credit ratings are issued, the credit rating agency shall not issue any further credit ratings on those debt instruments from the moment a period of 3 years have elapsedrelation to 10 debt instruments within an initial period of three years, it shall not issue any further credit ratings on those debt instruments until 20 debt instruments of the same issuer have been rated by other credit rating agencies.
Amendment 263 #
Proposal for a regulation
Article 1 – point 8
Article 1 – point 8
Regulation (EC) No 1060/2009
Article 6b – paragraph 7 a (new)
Article 6b – paragraph 7 a (new)
7a. This Article applies only to credit rating agencies with a market share exceeding 10 %.
Amendment 269 #
Proposal for a regulation
Article 1 – point 10 – point a
Article 1 – point 10 – point a
Regulation (EC) No 1060/2009
Article 8 – paragraph 2
Article 8 – paragraph 2
2. A credit rating agency shall adopt, implement and enforce adequate measures to ensure that the credit ratings and the rating outlooks it issues are based on a thorough analysis of all the information concerning all types of financial risks, including environmental risks, that is available to it and that is relevant to its analysis according to the applicable rating methodologies. It shall adopt all necessary measures so that the information it uses in assigning credit ratings and rating outlooks is of sufficient quality and from reliable sources.
Amendment 298 #
Proposal for a regulation
Article 1 – point 11
Article 1 – point 11
Regulation (EC) No 1060/2009
Article 8a – title
Article 8a – title
Information on structured finance instruments
Amendment 299 #
Proposal for a regulation
Article 1 – point 11
Article 1 – point 11
Regulation (EC) No 1060/2009
Article 8a – paragraph 1
Article 8a – paragraph 1
1. The issuer, the originator and the sponsor of a structured finance instrument established in the Union shall disclose to the public, in accordance with paragraph 4, all information on the credit quality and, in so far as available, the performance of the finance instruments. As regards structured finance instruments, all information on the credit quality and performance of the individual underlying assets of the structured finance instrument, the structure of the securitization transaction, the cash flows and any collateral supporting a securitisation exposure as well as any information that is necessary to conduct comprehensive and well informed stress tests on the cash flows and collateral values supporting the underlying exposures shall be disclosed to the public.
Amendment 303 #
Proposal for a regulation
Article 1 – point 11
Article 1 – point 11
Regulation (EC) No 1060/2009
Article 8b – paragraph 1
Article 8b – paragraph 1
1. Where an issuer or a related third party intends to solicit a credit rating of a structured finance instrument, it shall refer the decision mandateing at least two credit rating agencies to a joint committee with equal representation of issuers and investors. Each credit rating agency shall provide its own independent credit rating.
Amendment 309 #
Proposal for a regulation
Article 1 – point 12
Article 1 – point 12
Regulation (EC) No 1060/2009
Article 10 – paragraph 1 – subparagraph 1
Article 10 – paragraph 1 – subparagraph 1
1. A credit rating agency shall disclose any solicited credit rating or rating outlook, as well as any decision to discontinue a credit rating, on a non-selective basis and in a timely manner. In the event of a decision to discontinue a credit rating, the information disclosed shall include full reasons for the decision.
Amendment 310 #
Proposal for a regulation
Article 1 – point 12
Article 1 – point 12
Regulation (EC) No 1060/2009
Article 10 – paragraph 1a (new)
Article 10 – paragraph 1a (new)
1a. Unsolicited credit ratings of the investor-pays nature are exempted from the disclosure requirement referred to in Annex I, Section D, Part I, item 3.
Amendment 313 #
Proposal for a regulation
Article 1 – point 12 a (new)
Article 1 – point 12 a (new)
Regulation (EC) No 1060/2009
Article 10 – paragraph 3 a (new)
Article 10 – paragraph 3 a (new)
(12a) In Article 10 the following paragraph is inserted: "3a. Credit ratings and rating outlooks for sovereign debt shall not contain any prescription, guideline or reference relating to policy changes. Any form of public communication relating to potential changes of sovereign ratings other than credit ratings and rating outlooks, and accompanying press releases, shall be prohibited."
Amendment 314 #
Proposal for a regulation
Article 1 – point 12 b (new)
Article 1 – point 12 b (new)
Regulation (EC) No 1060/2009
Article 10 – paragraph 3 b (new)
Article 10 – paragraph 3 b (new)
Amendment 315 #
Proposal for a regulation
Article 1 – point 12 c (new)
Article 1 – point 12 c (new)
Regulation (EC) No 1060/2009
Article 10 – paragraph 3 c (new)
Article 10 – paragraph 3 c (new)
(12c) In Article 10 the following paragraph is inserted: "3c. Credit rating agencies shall not modify credit ratings until at least four months after issuing a change in a credit rating or rating outlook."
Amendment 322 #
Proposal for a regulation
Article 1 – point 14
Article 1 – point 14
Regulation (EC) No 1060/2009
Article 11a – paragraph 2
Article 11a – paragraph 2
2. ESMA shall establish a European Rating Index which will include all credit ratings submitted to ESMA pursuant to paragraph 1 and, an aggregated rating index for any rated debt instrument. The index and individual credit ratings and the average default probability in accordance with Annex I, Section D, paragraph 2. The index and individual credit ratings, with the exception of credit ratings of the investor- pays nature, shall be published on ESMA's website.
Amendment 372 #
Proposal for a regulation
Article 1 – point 24 – point a
Article 1 – point 24 – point a
Regulation (EC) No 1060/2009
Article 39 – paragraph 1
Article 39 – paragraph 1
1. By 7 December 2012, the Commission shall make an assessment of the application of this Regulation, including an assessment of the reliance on credit ratings in the Union, the impact on the level of concentration in the credit rating market, the cost and benefits of impacts of the Regulation and, of the appropriateness of the remuneration of the credit rating agency by the rated entity (issuer-pays model), and submit a reportof alternative allocation and payment models, such as allocation by an independent body upon tender, deferred payment (payment upon result) and the investor-pays model, and submit a report indicating the legislative action to be taken and a road map, thereon to the European Parliament and the Council
Amendment 377 #
Proposal for a regulation
Article 1 – point 24 – point b
Article 1 – point 24 – point b
Regulation (EC) No 1060/2009
Article 39 – paragraph 4
Article 39 – paragraph 4
4. By 1 July 2015, the Commission shall assess the situation in the credit rating market, in particular the availability of sufficient choice in order to comply with the requirements set out in Articles 6b and 8b. The review shall also assess the need to extendappropriateness of the scope of the obligations, in Article 8a to include other financial products, including covered bondscluding covered bonds and other non-structured financial instruments, in Article 8a.
Amendment 390 #
Proposal for a regulation
Annex I – point 1 – point b – point ii
Annex I – point 1 – point b – point ii
Regulation (EC) No 1060/2009
Annex I – Section B – point 3 – paragraph 1 – point aa
Annex I – Section B – point 3 – paragraph 1 – point aa
(aa) a shareholder or member of a credit rating agency holding, directly or indirectly, 10% or more of either the capital or the voting rights of that credit rating agency or being otherwise in a position to exercise significant influence on the business activities of the credit rating agency, directly or indirectly owns financial instruments of the rated entity or a related third party or has any other direct or indirect ownership interest in that entity or party, other than holdings in diversified collective investment schemes, including managed funds such as pension funds or life insurance, which do not put him in a position to exercise significant influence on the business activities of the scheme;
Amendment 395 #
Proposal for a regulation
Annex I – point 1 – point b – point iii
Annex I – point 1 – point b – point iii
Regulation (EC) No 1060/2009
Annex I – Section B – point 3 – paragraph 1 – point ba
Annex I – Section B – point 3 – paragraph 1 – point ba
(ba) the credit rating is issued with respect to a rated entity or a related third party which directly or indirectly holds 10% or more of either the capital or the voting rights of that credit rating agency;
Amendment 398 #
Proposal for a regulation
Annex I – point 1 – point b – point iv
Annex I – point 1 – point b – point iv
Regulation (EC) No 1060/2009
Annex I – Section B – point 3 – paragraph 1 – point ca
Annex I – Section B – point 3 – paragraph 1 – point ca
(ca) a shareholder or member of a credit rating agency holding, directly or indirectly, 10% or more of either the capital or the voting rights of that credit rating agency or being otherwise in a position to exercise significant influence on the business activities of the credit rating agency, is a member of the administrative or supervisory board of the rated entity or a related third party;
Amendment 405 #
Proposal for a regulation
Annex I – point 1 – point d
Annex I – point 1 – point d
Regulation (EC) No 1060/2009
Annex I – Section B – point 4 – subparagraph 1
Annex I – Section B – point 4 – subparagraph 1
4. Neither a credit rating agency nor any person holding, directly or indirectly, at least 5% of the capital or voting rights of the credit rating agency or otherwise in a position to significantly influence the business activities of the credit rating agency shall provide consultancy or advisory services to the rated entity or a related third party regarding the corporate or legal structure, assets, liabilities or activities of that rated entity or related third party.
Amendment 408 #
Proposal for a regulation
Annex I – point 2 – point d
Annex I – point 2 – point d
Regulation (EC) No 1060/2009
Annex I – Section C – point 8 – paragraph 1 a (new)
Annex I – Section C – point 8 – paragraph 1 a (new)
A lead rating analysts switching to another credit rating agency shall cease to be involved in credit rating activities related to a rated entity or its related third parties the lead rating analyst was involved in previously for a period of four years.
Amendment 409 #
Proposal for a regulation
Annex I – point 4 – point a
Annex I – point 4 – point a
Regulation (EC) No 1060/2009
Annex I – Section D – Part I – point 1 a (new)
Annex I – Section D – Part I – point 1 a (new)
1a. Credit ratings and rating outlooks shall be expressed in numbers indicating the probability of default, accompanied by an explanatory statement.
Amendment 410 #
Proposal for a regulation
Annex I – point 4 – point f
Annex I – point 4 – point f
Regulation (EC) No 1060/2009
Annex I – Section D – Part I – point 5 – subparagraph 1
Annex I – Section D – Part I – point 5 – subparagraph 1
5. When announcing a credit rating or a rating outlook, a credit rating agency shall explain in its press releases or reportsand explanatory statement the key elements underlying the credit rating or the rating outlook.
Amendment 415 #
Proposal for a regulation
Annex I – point 6
Annex I – point 6
Regulation (EC) No 1060/2009
Annex I – Section D – part III – paragraph 2 a (new)
Annex I – Section D – part III – paragraph 2 a (new)
2a. The research report accompanying a change compared to the previous sovereign rating or related rating outlook shall not include prescriptions, guidelines or references relating to policy changes.