When the UK leaves the EU, the FCA will become the UK regulator of credit rating agencies.
We continue to prepare for a range of scenarios, including one in which the UK leaves the EU without a deal and without entering an implementation period.
The Treasury has announced its proposed approach to amending retained EU law related to credit rating agencies (CRAs), to be laid under the EU (Withdrawal) Act. The draft SI transfers UK regulation of CRAs from the European Securities and Markets Authority (ESMA) to the FCA and make amendments to retained EU law to ensure that it continues to operate effectively in the UK once the UK leaves the EU. It is not intended to make policy changes, other than where appropriate to reflect the UK’s new position outside the EU.
To support a smooth transition to the new regime for CRAs in the UK, and minimise disruption to the users of credit ratings, the draft SI includes 2 registration regimes for firms:
- A conversion regime. This will allow CRAs established in the UK before exit day to convert their ESMA registration into registration with the FCA. CRAs certified with ESMA will also be able to extend their certification to the UK.
- A temporary registration regime. This will offer temporary registration to CRAs that apply for registration with the FCA before exit day, provided that they are a UK legal entity and are part of the same group as a CRA with an existing ESMA registration. This will allow time for us to assess these applications. This regime is distinct from the Temporary Permission Regime for inbound passporting EEA firms and funds.
For firms not falling into the above categories, applications to register as a CRA will be assessed in accordance with the usual procedures in the CRA Regulation.
What CRAs should do now
CRAs should let us know if they intend to offer services to UK markets from exit day.
Email: [email protected]
A draft application form (DOCX) for registration as a CRA is now available. Firms intending to apply for full registration and to be included in the temporary registration regime should complete this form. We have also published notes to completing the form (DOCX).
There is also a conversion form for UK CRAs (DOCX) who wish to convert their current ESMA registered-status into FCA registration.
These forms can be submitted to us by email from 7 January 2019.
If you have any queries on these forms, email us.
The Treasury intends to lay the SI before Parliament in the Autumn. If, as expected, the UK enters an implementation period after Brexit, the changes made in the SI will not take effect on 29 March 2019.
We are consulting on updating our Binding Technical Standards to reflect the changes that will be introduced through the SI.
We are consulting on the fees that CRAs will have to pay. If you wish to comment, please note that the consultation closes on 14 January 2019.
|10 October 2018||FCA consultation on applicable technical standards for CRAs|
|30 November 2018||Draft SI published|
|15 November 2018||FCA fees consultation|
|Q4 2018||SI laid before Parliament|
|Q4 2018||FCA to offer pre-application support|
|Early 2019||Application window opens|
|29 March 2019||Responsibility for the regulation of CRAs in the UK transfers to the FCA|