06 February 2014
In accordance with the Credit Rating Agencies Regulation (CRA 3), the EBA, ESMA and EIOPA have reviewed all their existing guidelines and recommendations in order to identify, and where appropriate remove, references to external credit ratings that could trigger sole or mechanistic reliance on such ratings.
This final report includes the amendments to ESMA's Guidelines on Money Market Funds (MMF) according to the definition of ‘sole and mechanistic reliance' contained therein.
This common definition aims at harmonising the different interpretations of ‘sole and mechanistic reliance' in the ESAs regulations and guidelines.
This definition, to which the ESAs intend to refer to in all their future guidelines, recommendations and draft technical standards, was developed taking into account all the comments received during the public consultation that ended on 5 December 2013.
Regulation (EU) No 462/2013 of 21 May 2013 (CRA 3) mandates the EBA, EIOPA and ESMA to review and, where appropriate, remove all references to credit ratings in existing guidelines and recommendations that have the potential to trigger sole or mechanistic reliance. This article puts forward the first of the Principles for reducing reliance on CRA Ratings issued by the Financial Stability Board on 27 October 2010.