The European Communities (Credit Rating Agencies) Regulations 2010 were published on Friday June 4 giving effect to certain aspects of the Regulation of the European Parliament and of the Council on Credit Rating Agencies. The Minister for Finance, Brian Lenihan TD, made the regulations.
Regulation 4 designates the Central Bank and Financial Services Authority of Ireland as the competent authority in Ireland for the purposes of the EU regulation and this regulation came into effect yesterday, Monday June 7.
The remaining regulations will come into effect on December 7 2010. Regulation 5 allows the Central Bank and Financial Services Authority of Ireland to charge registration or supervisory fees to credit rating agencies established within its jurisdiction. Regulation 6 provides that an offence has been committed in the event that a credit rating agency or a person other than a credit rating agency contravenes a requirement imposed by the EC regulation. Penalties include fines and/or imprisonment. Regulation 7 requires that where a conviction under the regulations has taken place, a statement of conviction providing details of the offence and penalties imposed should be published, unless such publication would seriously jeopardise the financial markets or cause disproportionate damage to any party involved.
The level of penalties imposed by these regulations should be considered a temporary measure as a proposal to establish a European securities and markets authority, which would have the power to directly impose penalties, is being negotiated within the EU at this time.