23 Amendments of Jürgen KLUTE related to 2011/0361(COD)
Amendment 104 #
Proposal for a regulation
Recital 11 a (new)
Recital 11 a (new)
(11a) Above and beyond the principle of rotation, and to enable credit rating agencies to perform services to issuers as independently as possible, contracts between a given credit rating agency and a given issuer should not be renewable, even when the contractual relationship has not run to its maximum duration. In addition, clauses should be prohibited if they serve in any way to link the ratings issued to the remuneration of the credit rating agency or the possibility of terminating the contract. The object is, as far as possible, to curtail attempts to make the work of credit rating agencies subject to conditions, whether under contractual provisions or by means an implicit threat not to renew a contract.
Amendment 111 #
Proposal for a regulation
Recital 12
Recital 12
(12) One of the specificities of sovereign ratings is that the issuer-pays model generally does not apply. Instead, the majority of ratings are produced as unsolicited ratings, providing the basis for both solicited and unsolicited ratings of the financial institutions of the country concerned. It is therefore not necessary to require the rotation of credit rating agencies issuing sovereign ratingsGiven the role played by the issue of sovereign ratings in triggering and exacerbating the current sovereign debt crisis, measures should be taken to safeguard the stability and integrity of the euro area and its member countries. Furthermore, as far as sovereign debt is concerned, investors have reliable background documents enabling them to assess the debt, not least the reports produced by the Commission, the European Central Bank, and the International Monetary Fund. Credit rating agencies should therefore be prohibited from carrying out analyses or issuing ratings or rating outlooks on any sovereign debt securities, whether concerning a single Member State or a group of Member States. If a credit rating agency fails to comply with that ban, its registration should be suspended. This measure is intended to allow for the present circumstances of the euro area and should be reviewed at the end of 2015.
Amendment 133 #
Proposal for a regulation
Recital 17 a (new)
Recital 17 a (new)
(17a) To support the rotation mechanism and reduce rating market concentration, every issuer should be subject to a limit of 50% of the notional sum rated by each credit rating agency. The aim is to encourage issuers to work with several credit rating agencies. So as not to penalise those issuers which voluntarily, or are legally obliged to, obtain more than one rating for a given security, or which have issued only one security, the notional sums corresponding to securities rated by more than one credit rating agency should, for the purposes of this limit, be apportioned among the credit rating agencies issuing the ratings.
Amendment 149 #
Proposal for a regulation
Recital 20 a (new)
Recital 20 a (new)
(20a) The ratings issued by credit rating agencies should be directly related to credit risk. This is the only way to ensure comparability, whether in terms of the systems used by individual credit rating agencies or in terms of the types of financial instruments rated. It is unacceptable that investors and regulators should have no specific, objective criterion, verifiable at least a posteriori, enabling them to compare the different agency ratings and the agencies’ risk assessment performance. Furthermore, no credit rating system can be credible if financial instruments are rated equally when the probability of default is not the same. That being the case, ESMA should draw up a harmonised rating scale making the probability of default the decisive criterion for ratings issued.
Amendment 207 #
Proposal for a regulation
Article 1 – point 1 a (new)
Article 1 – point 1 a (new)
Regulation (EC) No 1060/2009
Article 1 – paragraph 2 a (new)
Article 1 – paragraph 2 a (new)
(1a) In Article 1 the following paragraph is inserted: “Lastly, this Regulation applies to ratings concerning Member States and their sovereign debt.”
Amendment 208 #
Proposal for a regulation
Article 1 – point 3 – point -a (new)
Article 1 – point 3 – point -a (new)
Regulation (EC) No 1060/2009
Article 3 – paragraph 1 – point (a)
Article 3 – paragraph 1 – point (a)
(-a) Point (a) is amended as follows: (a) “credit rating” means a service provided to investors and consumers in the form of an opinion regarding the creditworthiness of an entity, a debt or financial obligation, debt security, preferred share or other financial instrument, or of an issuer of such a debt or financial obligation, debt security, preferred share or other financial instrument, issued using an established and defined ranking system of rating categories and subject to liability arrangements;
Amendment 221 #
Proposal for a regulation
Article 1 – point 6
Article 1 – point 6
Regulation (EC) No 1060/2009
Article 5 b – paragraph 2
Article 5 b – paragraph 2
The European Systemic Risk Board (ESRB) established by Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24 November 2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board (***) shall not refer to credit ratings in its warnings and recommendations where such references have the potential to trigger mechanistic reliance on credit ratings.
Amendment 234 #
Proposal for a regulation
Article 1 – point 8
Article 1 – point 8
Regulation (EC) No 1060/2009
Article 6 a – paragraph 1 – introductory part
Article 6 a – paragraph 1 – introductory part
1. A shareholder or a member of a credit rating agency holding at least 5% of stake in the capital or the voting rights in that agency shall not
Amendment 237 #
Proposal for a regulation
Article 1 – point 8
Article 1 – point 8
Regulation (EC) No 1060/2009
Article 6 a – paragraph1 – point a
Article 6 a – paragraph1 – point a
(a) hold 5% or more of the capital ofin 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 240 #
Proposal for a regulation
Article 1 – point 8
Article 1 – point 8
Regulation (EC) No 1060/2009
Article 6 a – paragraph 1 – point b
Article 6 a – paragraph 1 – point b
(b) have the right or the power to exercise 5% or more of the voting rights in any other credit rating agency;
Amendment 259 #
Proposal for a regulation
Article 1 – point 8
Article 1 – point 8
Regulation (EC) No 1060/2009
Article 6 b – paragraph 2 – point c a (new)
Article 6 b – paragraph 2 – point c a (new)
(ca) irrespective of its duration, a contract may not be renewed, nor may it contain clauses linking the remuneration of the credit rating agency to the ratings issued.
Amendment 267 #
Proposal for a regulation
Article 1 – point 8
Article 1 – point 8
Regulation (EC) No 1060/2009
Article 6 b a (new)
Article 6 b a (new)
Amendment 273 #
Proposal for a regulation
Article 1 – point 10 – point b
Article 1 – point 10 – point b
Regulation (EC) No 1060/2009
Article 8 – paragraph 5
Article 8 – paragraph 5
Amendment 317 #
Proposal for a regulation
Article 1 – point 12 e (new)
Article 1 – point 12 e (new)
Regulation (EC) No 1060/2009
Article 10 a (new)
Article 10 a (new)
(12e) The following article is inserted after Article 10: ‘Article 10a Issue of sovereign ratings 1. Credit rating agencies shall be expressly prohibited from carrying out any assessment, whether solicited or unsolicited, or issuing ratings or rating outlooks on sovereign debt instruments. 2. Paragraph 1 shall apply both to the sovereign debt of single Member States and to assessments concerning groups of Member States.’
Amendment 332 #
Proposal for a regulation
Article 1 – point 18 – point b
Article 1 – point 18 – point b
Regulation (EC) No 1060/2009
Article 21 – paragraph 4 a – point a
Article 21 – paragraph 4 a – point a
(a) a harmonised standard rating scale to be used, in accordance with Article 11a, by registered and certified credit rating agencies, which will be based upon the metric to measure credit risk and the number of rating categories and cut off values for each rating category, determined according to the likelihood of default;
Amendment 367 #
Proposal for a regulation
Article 1 – point 21 – point b a (new)
Article 1 – point 21 – point b a (new)
Regulation (EC) No 1060/2009
Article 36 a – paragraph 2 – point i a (new)
Article 36 a – paragraph 2 – point i a (new)
(ba) In Article 36a(2) the following point is added: (ia) Where a credit rating agency fails to comply with Article 10a, its registration shall be suspended for five years.
Amendment 371 #
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 20123, 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 report thereon to the European Parliament and the Council’;
Amendment 378 #
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
Amendment 389 #
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 a a
Annex I – Section B – point 3 – paragraph 1 – point a a
‘(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 ofin 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 394 #
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 b a
Annex I – Section B – point 3 – paragraph 1 – point b a
‘(ba) the credit rating is issued with respect to a rated entity or a related third party which, either directly or indirectly holds 10% or more of either the, is a holder of capital or the voting rights ofin that credit rating agency;’;
Amendment 397 #
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 c a
Annex I – Section B – point 3 – paragraph 1 – point c a
‘(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 ofin 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 399 #
Proposal for a regulation
Annex I – point 1 – point b – point v
Annex I – point 1 – point b – point v
Regulation (EC) No 1060/2009
Annex I – Section B – point 3 – second paragraph
Annex I – Section B – point 3 – second paragraph
‘A credit rating agency shall also immediately assess, taking into account the limits laid down in the first subparagraph, whether there are grounds for re-rating or withdrawing the existing credit rating or credit outlook.’;
Amendment 404 #
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.’;