CRA

ESMA Fines Fitch CRAs for Breaching Conflict of Interest Requirements

 

On March 28, ESMA fined three credit rating agencies, all belonging to the Fitch Group, a total of €5,132,500, in relation to breaching the conflict of interest requirements under the CRA Regulation (1060/2009) (CRAR). They were fined because, between June 2013 and April 2018, 20% of three Fitch subsidiaries were indirectly owned by an individual through a French entity. However, that same individual was also sitting on the boards of three entities rated by the Fitch subsidiaries.

Each of the three subsidiaries voluntarily undertook measures to ensure similar infringements would not be committed again, and this was considered by ESMA, along with other mitigating and aggravating factors, when the fines were determined. The subsidiaries can appeal the decision but this will not have a suspensive effect.

The public notice issued in relation to the fines can be found here.

Joint Annual CRA Asset-Size Threshold Adjustment

On December 19, 2012, the Fed, FDIC and OCC released the annual adjustment to asset-size thresholds used to define small bank, small savings association, intermediate small bank and intermediate small savings association under the CRA.  The asset-size threshold adjustment was effective January 1.  Joint Press Release.  Joint Technical Amendment.