ESMA has launched a consultation on the above. The draft guidelines aim to provide clarification on certain aspects of the scope of the Credit Rating Agencies Regulation and discuss the following: obligation to register; credit rating activities and exemptions from registration; private ratings; establishment of branches outside the EU by registered credit rating agencies; specific disclosure best practices and enforcement of the scope of the Regulation. Responses are required by 20 February 2013 and an open hearing on the consultation will take place in Paris on 22 January 2013.

The first of these reports provides an overview of the internal controls and conflicts of interest procedures adopted by various credit rating agencies and concludes that credit rating agencies tend to adopt different policies and procedures to ensure the quality and integrity of the rating process, and to manage conflicts of interest, because they vary in size. However, despite these differences, all surveyed agencies have adopted some form of policies and procedures to provide internal controls and safeguard against conflicts of interest. The second report is a consultation which recommends establishing supervisory colleges for internationally active credit rating agencies and includes preliminary guidelines on how to establish and operate them. Responses are required by 15 February 2012.

The Presidency has conducted negotiations with the European Parliament and the EC in view of reaching an agreement on the compromise text with the aim of adoption of this compromise at first reading. On 30 November 2012 a provisional political agreement was reached.

Reports by rapporteurs offering amendments to the proposed texts.

Presidency compromise drafts of the Regulations have been published together with a “general approach” document by which the Presidency invites the Council to agree on both Proposals, based on the related Presidency compromises and to mandate the Presidency to undertake negotiations with the European Parliament with a view to reaching an agreement before the end of 2012.

The Cyprus Presidency has announced that a political agreement has been reached with regard to the texts of the above, which introduces additional rules for credit rating agencies to follow concerning sovereign debt ratings. The agreed Draft Regulation and Directive require official confirmation from the European Parliament and the Council of the European Union

FMLC has written to Sharon Bowles MEP saying it believes that serious legal uncertainty would arise from the implementation of certain provisions concerned with civil liability which are contemplated in the proposal for, and various drafts of, CRA III, particularly with regard to the reversal of the burden of proof on claimants.

Text of the above, given at a “Meet the Experts” forum in London, follows. Topics include: ESMA’s work on the single rulebook and financial stability; investor protection; credit rating agency supervision; EURIBOR; IFRS; audit and forbearance.

FMLC has published the text of a letter it has sent to Jonathan Faull (EC) in which it expresses concern that serious legal uncertainty would arise from the implementation of certain provisions concerned with civil liability which are contemplated in the proposals for CRA III, particularly with regard to the reversal of the burden of proof on claimants.

Text of the above, given at BBA, follows. Topics include: factor which has contributed to the undermining of investor trust in the securities market; investor protection; the single rule book; MiFID; EMIR; interest rate benchmarks and credit rating agencies.