ESMA Withdraws the Registrations of Ten UK-based Institutions

The European Securities and Markets Authority (ESMA), a European Union financial regulatory agency and European Supervisory Authority, yesterday announced its decisions on withdrawing the registrations of six UK-based Credit Rating Agencies(CRAs) as well as four Trade Repositories(TRs). The latest announcement follows the end of Brexit transition period.

The six CRAs are:

• AM Best Europe-Rating Services Ltd;
  

• DBRS Ratings Ltd;

• Fitch Ratings Ltd;

• Fitch Ratings CIS Ltd;

• Moody’s Investors Service Ltd;

• The Economist Intelligence Unit Ltd;

Due to the CRA Regulation and the European Market Infrastructure Regulation (EMIR), and the Regulation on transparency of securities financing transactions and of reuse (SFTR), ESMA is forced to withdraw the registration of a firm where it no longer meets the conditions under which it was registered, including being a legal person established in the EU.

The ratings issued by the above mentioned CRAs cannot be used for regulatory purposes in the EU unless endorsed by an EU CRA. ESMA, in a previous communication on 27 October 2020, confirmed that all UK-based CRAs except the Economist Intelligence Unit Ltd took steps to ensure that an EU CRA is willing and able to endorse its credit ratings.

And the four TRs are:

• DTCC Derivatives Repository Plc;

• UnaVista Limited;

• CME Trade Repository Ltd; and

• ​ICE Trade Vault Europe Ltd.

According to the regulator, UK-based TRs will no longer be used for derivatives and SFTs reporting. As a result of these withdrawal decisions, EU derivatives and securities financing transactions subject to the reporting obligation under EMIR and SFTR can no longer be reported to any of the TRs above but need to be reported to an EU established TR.