Code of Conduct Fundamentals for Credit Rating Agencies
The IOSCO CRA Principles were intended to be a useful tool for CRAs, regulators, and others seeking to improve how CRAs operate and how credit ratings are used by market participants. The IOSCO CRA Principles address four key objectives to promote informed, independent analyses and opinions by CRAs:
- Quality and integrity of the rating process: CRAs should endeavour to issue opinions that help reduce the asymmetry of information among borrowers, lenders and other market participants.
- Independence and conflicts of interest: CRA ratings decisions should be independent and free from political or economic pressures and from conflicts of interest arising due to the CRA’s ownership structure, business or financial activities, or the financial interests of the CRA’s employees. CRAs should, as far as possible, avoid activities, procedures or relationships that may compromise or appear to compromise the independence and objectivity of the credit rating operations.
- Transparency and timeliness of ratings disclosure: CRAs should make disclosure and transparency an objective in their ratings activities.
- Confidential information: CRAs should maintain in confidence all non-public information communicated to them by any issuer, or its agents, under the terms of a confidentiality agreement or otherwise under a mutual understanding that the information is shared confidentially.