On Jan. 3, EC issued proposed changes re ESMA fees for CRAs.
EC issued draft delegated regulation for consultation, aims to harmonize, simplify some aspects of ESMA's collection system for fees from credit rating agencies (CRAs).
ESMA is responsible for direct supervision of certain financial markets entities in EU.
CRAs must pay ESMA an annual fee for this service, Credit Rating Agencies Regulation (CRAR Reg 462/2013) provides for fees to cover registration, certification, supervision.
Delegated regulation Reg 272/2012 seeks to ensure fair and clear allocation of fees.
However, lack of harmonization between these has resulted in unnecessary complexity, ESMA resources not used as efficiently as possible, risk of incorrect fee calculation.
EC sought technical advice from ESMA on possible harmonization and simplification.
Proposed Changes
To address issues and ESMA advice, EC proposes to align several elements of the fees to be paid by CRA with corresponding rules for other entities to ensure coherence.
Will amend delegated regulation 272/2012 to specify that fees should fully cover costs of supervisory activities; to be determined in accordance with ESMA budget procedure.
Fees based on applicable turnover from audited revenues from both core and ancillary services; CRAs must ensure timely submission of audited accounts for fee calculation.
Where accounts in other currency, ESMA will convert to euros using rate from ECB.
Amendments to harmonize the payment modalities so that payment of supervisory fees is done in one installment to be paid by the end of the first quarter of each year.
No registration/certification fees will be reimbursed in case of application withdrawal.
Approach aligned re payment of fees in first year of registration; certified CRAs will be exempted from payment of supervisory fees in year in which certification takes effect.
Effectiveness
The closing date for feedback on draft amending delegated regulation is Jan. 31, 2024.
Commission adoption of new delegated regulation is planned for Q4 of 2024.
Mar. 2024 EC Adoption
On Mar. 11, 2024, EU CMSN adopted regulation (C(2024)1443) on ESMA CRA fees.
Delegated regulation aligns several elements of the fees to be paid by credit rating agencies to ESMA with corresponding rules in other areas in which ESMA charges fees.
Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union; it shall apply from Jan. 1, 2025.
Jun. 2024 Official Journal
On Jun. 18, 2024, EU CMSN issued final Reg 2024/1706 of Mar. 11 in Official Journal.
Regulation enters into force on 20th day following publication in the Official Journal of the European Union, Jul. 8, 2024; it shall apply from Jan. 1, 2025.
