MADRID – The final report for the new code-of-conduct for the credit rating agencies (CRAs) has been published, which includes amendments by the International Organisation of Securities Commissions (Iosco). Amendments to the Iosco code, released in March, address agency ratings for structured finance products and their processes and procedures.
Iosco’s amendments prohibit CRA analysts from making proposals or recommendations for the design of rated structured finance products. Remuneration policies and practices, models, methodologies and decision-making processes will also be the subject of regular, objective and formal reviews. Employees must have appropriate knowledge of and training in products, while the rating agencies must publish transparent information about their ratings processes – including disclosing whether any one issuer, originator, arranger, subscriber or other client makes up more than 10% of the CRA’s annual revenue.