ESMA issues clarification on credit ratings and rating outlooks publication timelines
The European Securities and Markets Authority (ESMA) has published an update to its Questions & Answers (Q&A) on the application of the CRA Regulation, adding a new section on Disclosure and Presentation of Credit Ratings.
The new section contains new Q&As which provide clarification to credit rating agencies (CRAs), users of ratings, rated entities and market participants more generally. The new Q&A clarifies:
- how much time a CRA should provide to a rated entity prior to the publication of a credit rating or rating outlook: 24 hours, at a minimum;
- that notification of credit ratings or rating outlooks should be transmitted during business hours of the rated entity, and when it is not transmitted during business hours, only becomes valid from for the purposes of the 24 hour rule upon the opening of the business hours of the rated entity; and
- that if a rated entity reverts to a CRA prior to the end of the 24 hour period, then the CRA should publish the credit rating or rating outlook without further delay.
The guidance will ensure that CRAs and rated entities are clear as to their roles and responsibilities under this provision. This guidance will also protect investors by ensuring the timely publication of credit ratings and rating outlooks.