Home Europe European Commission Commission Implementing Regulation (EU) 2021/2005 of 16 Nove...
Date: 2021-11-17 Category: Not Applicable State: Union Government Country: Europe

Commission Implementing Regulation (EU) 2021/2005 of 16 November 2021 laying down implementing technical standards amending Implementing Regulation (EU) 2016/1799 as regards the mapping tables specifying the correspondence between the credit risk assessments of external credit assessment institutions and the credit quality steps set out in Regulation (EU) No 575/2013 of the European Parliament and of the Council (Text with EEA relevance)

Issued by European Commission · Directorate-General for Financial Stability

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Executive Summary & Key Takeaways

Executive Summary: Commission Implementing Regulation (EU) 2021/2005 amends Implementing Regulation (EU) 2016/1799, updating the mapping tables that specify the correspondence between credit risk assessments of external credit assessment institutions (ECAIs) and the credit quality steps outlined in Regulation (EU) No 575/2013. These amendments account for changes in the quantitative and qualitative factors underpinning credit assessments, the extension of ECAI assessments to new market segments, the registration/de-registration of ECAIs and changes to rating scale symbols. The regulation enters into force on the twentieth day following its publication in the Official Journal of the European Union. Key Points / Main Content: * **Updates to Mapping Tables:** Annex III of Implementing Regulation (EU) 2016/1799 is replaced with a new version, which contains updated mapping tables. * **Changes in ECAI Assessments:** The changes reflect that the quantitative and qualitative factors that underpin the credit assessments of some mappings have changed. * **New Market Segments:** Some ECAIs have extended their credit assessments to new market segments resulting in new rating scales and new credit rating types. * **ECAI Registration/De-registration:** Mappings are added for newly registered ECAIs and removed for de-registered ECAIs, in accordance with Article 136(1) of Regulation (EU) No 575/2013. * **Symbol Updates:** Mappings are amended to reflect changes in the symbols used by an ECAI to denote rating categories. Impact Analysis: European Banking Authority, European Securities and Markets Authority, and the European Insurance and Occupational Pensions Authority (European Supervisory Authorities): * Impact: These authorities jointly submitted the draft implementing technical standards to the Commission, upon which this regulation is based. * Action Required: Ensure the updated mapping tables are used. Credit Institutions and other entities subject to Regulation (EU) No 575/2013: * Impact: The regulation affects how credit risk assessments from ECAIs are used for prudential requirements. * Action Required: Update internal processes and models to reflect the new mapping tables in Annex III. External Credit Assessment Institutions (ECAIs): * Impact: ECAIs are impacted by the changes of mapping to credit quality steps and should ensure that their assessments are appropriately mapped. * Action Required: Review and understand the updated mappings applicable to their credit assessments. European Commission: * Impact: Responsible for adopting the regulation and ensuring its implementation across Member States. * Action Required: Monitor the implementation of the regulation and address any issues that may arise.

Key Entities Referenced

European Union: A political and economic union of member states located primarily in Europe. European Commission: An institution of the European Union, responsible for proposing legislation, implementing decisions, upholding the EU treaties and managing the day-to-day business of the EU. European Parliament: One of the legislative branches of the European Union and one of its seven institutions. Council of the European Union: A component of the EU legislative branch, where ministers from each national government meet to adopt laws and coordinate policies. European Banking Authority: A regulatory agency of the European Union. European Securities and Markets Authority: A European Union financial regulatory institution. European Insurance and Occupational Pensions Authority: A European Union financial regulatory institution. Brussels: The capital of Belgium and a major center of European politics, where the regulation was adopted.
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L 407/10 EN Official Journal of the European Union 17.11.2021 COMMISSION IMPLEMENTING REGULATION (EU) 2021/2005 of 16 November 2021 laying down implementing technical standards amending Implementing Regulation (EU) 2016/1799 as regards the mapping tables specifying the correspondence between the credit risk assessments of external credit assessment institutions and the credit quality steps set out in Regulation (EU) No 575/2013 of the European Parliament and of the Council (Text with EEA relevance) THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union, Having regard to Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and amending Regulation (EU) No 648/2012(1), and in particular Article 136(1), first subparagraph, thereof, Whereas: (1) Commission Implementing Regulation (EU) 2016/1799(2)specifies, in its Annex III, the correspondence between the relevant credit assessments issued by an external credit assessment institution (‘ECAI’) and the credit quality steps set out in Section 2 of Chapter 2 of Title II of Part Three of Regulation (EU) No 575/2013 (‘mapping’). (2) Since the latest amendments, by Commission Implementing Regulation (EU) 2019/2028(3), to Annex III to Implementing Regulation (EU) 2016/1799, the quantitative and qualitative factors underpinning the credit assessments of some mappings in Annex III to Implementing Regulation (EU) 2016/1799 have changed. In addition, some ECAIs have extended their credit assessments to new market segments, resulting in new rating scales and new credit rating types. It is therefore necessary to update the mappings of the ECAIs concerned. (3) Since the adoption of Implementing Regulation (EU) 2019/2028, two additional credit rating agencies have been registered in accordance with Articles 14 to 18 of Regulation (EC) No 1060/2009 of the European Parliament and of the Council(4), while two other ECAIs for which Implementing Regulation (EU) 2016/1799 provided a mapping have been deregistered. As Article 136(1) of Regulation (EU) No 575/2013 requires the specification of mappings for all ECAIs, that Regulation should be amended to provide a mapping for the newly registered ECAIs, and to remove the mapping for the deregistered ECAIs. (4) In addition, one ECAI registered in accordance with Articles 14 to 18 of Regulation (EC) No 1060/2009, and for which a mapping was provided in Implementing Regulation (EU) 2016/1799, has amended the symbols used to denote the rating categories of its rating scales. It is therefore necessary to amend the mapping for that ECAI to reflect the current symbols used by that ECAI. (5) This Regulation is based on the draft implementing technical standards submitted to the Commission by the European Banking Authority, the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority jointly (the European Supervisory Authorities). (1) OJ L 176, 27.6.2013, p. 1. (2) Commission Implementing Regulation (EU) 2016/1799 of 7 October 2016 laying down implementing technical standards with regard to the mapping of credit assessments of external credit assessment institutions for credit risk in accordance with Articles 136(1) and 136(3) of Regulation (EU) No 575/2013 of the European Parliament and of the Council (OJ L 275, 12.10.2016, p. 3). (3) Commission Implementing Regulation (EU) 2019/2028 of 29 November 2019 amending Implementing Regulation (EU) 2016/1799 as regards the mapping tables specifying the correspondence between the credit risk assessments of external credit assessment institutions and the credit quality steps set out in Regulation (EU) No 575/2013 of the European Parliament and of the Council (OJ L 313, 4.12.2019, p. 34). (4) Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (OJ L 302, 17.11.2009, p. 1).17.11.2021 EN Official Journal of the European Union L 407/11 (6) The European Supervisory Authorities have conducted open public consultations on the draft implementing technical standards on which this Regulation is based, analysed the potential related costs and benefits and requested the advice of the Banking Stakeholder Group established in accordance with Article 37 of Regulation (EU) No 1093/2010 of the European Parliament and of the Council(5); the advice of the Securities and Markets Stakeholder Group established in accordance with Article 37 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council(6); and the advice of the Insurance and Reinsurance Stakeholder Group established in accordance with Article 37 of Regulation (EU) No 1094/2010 of the European Parliament and of the Council(7). (7) Implementing Regulation (EU) 2016/1799 should therefore be amended accordingly, HAS ADOPTED THIS REGULATION: Article 1 Amendment to Regulation (EU) 2016/1799 Annex III to Implementing Regulation (EU) 2016/1799 is replaced by the text set out in the Annex to this Regulation. Article 2 Entry into force This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 16 November 2021. For the Commission The President Ursula VON DER LEYEN (5) Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC (OJ L 331, 15.12.2010, p. 12). (6) Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84). (7) Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC (OJ L 331, 15.12.2010, p. 48).ANNEX “ANNEX III Mapping tables for the purposes of Article 16 Credit quality step 1 2 3 4 5 6 A.M. Best (EU) Rating Services B.V. Long-term issuer credit rating scale aaa, aa+, aa, aa- a+, a, a- bbb+, bbb, bbb- bb+, bb, bb- b+, b, b- ccc+, ccc, ccc-, cc, c, d, e, f, s Long-term issue rating scale aaa, aa+, aa, aa- a+, a, a- bbb+, bbb, bbb- bb+, bb, bb- b+, b, b- ccc+, ccc, ccc-, cc, c, d, s Financial strength rating scale A++, A+ A, A- B++, B+ B, B- C++, C+ C, C-, D, E, F, S Short-term issuer rating scale AMB-1+ AMB-1- AMB-2, AMB- 4, d, e, f, s AMB-3 Short-term issue rating scale AMB-1+ AMB-1- AMB-2, AMB- 4, d, s AMB-3 ARC Ratings S.A. Medium- and long-term issuer rating scale AAA, AA A BBB BB B CCC, CC, C, D Medium- and long-term issue rating scale AAA, AA A BBB BB B CCC, CC, C, D Claims paying ability rating scale AAA, AA A BBB BB B CCC, CC, C, R Short-term issuer rating scale A-1+ A-1 A-2, A-3 B, C, D Short-term issue rating scale A-1+ A-1 A-2, A-3 B, C, D ASSEKURATA Assekuranz Rating-Agentur GmbH Long-term credit rating scale AAA, AA A BBB BB B CCC, CC/C, D Short-term corporate rating scale A++ A B, C, D L 407/12 EN Official Journal of the European Union 17.11.2021Axesor Risk Management S.L. Global long-term rating scale AAA, AA A BBB BB B CCC, CC, C, D, E Global short-term rating scale AS1+ AS1 AS2 AS3, AS4, AS5 Banque de France Global long-term issuer credit rating scale 3++ 3+, 3 4+ 4, 5+ 5, 6 7, 8, 9, P Global NEC long-term issuer credit rating scale 1+ 1, 1- 2+, 2, 2- 3+, 3, 3-, 4+, 4, 4-, 5, 5-, 6+, 6, 6- 7, 8, P 5+ BCRA — Credit Rating Agency AD Global long-term rating scale AAA, AA A BBB BB B CCC, CC, C, D Global short-term rating scale A-1+ A-1 A-2, A-3 B, C, D Pension-insurance company long-term scale AAA, AA A BBB BB B CCC, CC, C, D Pension-insurance company short-term scale A-1+ A-1 A-2, A-3 B, C, D Pension fund long-term scale AAA pf, AA pf A pf BBB pf BB pf B pf C pf Guarantee fund long-term scale AAA, AA A BBB BB B C, D Guarantee fund short-term scale A-1+ A-1 A-2, A-3 B, C, D Capital Intelligence Ratings Ltd International long-term issuer rating scale AAA, AA A BBB BB B C, RS, SD, D International long-term issue rating scale AAA, AA A BBB BB B CCC, CC, C, D International long-term insurer financial strength rating scale AAA, AA A BBB BB B C, RS, SD, D International short-term issuer rating scale A1+ A1 A2, A3 B, C, RS, SD, D International short-term issue rating scale A1+ A1 A2, A3 B, C, D International short-term insurer financial strength rating scale A1+ A1 A2, A3 B, C, RS, SD, D 17.11.2021 EN Official Journal of the European Union L 407/13Cerved Rating Agency S.p.A. Corporate long-term rating scale A1.1, A1.2, A1.3 A2.1, A2.2, A3.1 B1.1, B1.2 B2.1, B2.2 C1.1 C1.2, C2.1 Corporate short-term rating scale S-1 S-2 S-3 V-1, R-1 Creditreform Rating AG Long-term issuer rating scale AAA, AA A BBB BB, B C, SD, D Long-term issue rating scale AAA, AA A BBB BB, B C, D Short-term rating scale L1 L2 L3, NEL, D CRIF Ratings S.r.l. Long-term issuer rating scale AAA, AA A BBB BB B CCC, CC, C, D1S, D Long-term issue rating scale AAA, AA A BBB BB B CCC, CC, C, DS SME rating scale SME1, SME2 SME3 SME4 SME5, SME6 SME7, SME8 Short-term issuer rating scale IG-1 IG-2 SIG-1, SIG-2, SIG-3, SIG-4 Short-term issue rating scale IG-1 IG-2 SIG-1, SIG-2, SIG-3, SIG-4 DBRS Ratings GmbH Long-term obligations rating scale AAA, AA A BBB BB B CCC, CC, C, D Commercial paper and short-term debt rating scale R-1 H, R-1 M R-1 L R-2, R-3 R-4, R-5, D Financial strength rating scale AAA, AA A BBB BB B CCC, CC, C, R Expected loss rating scale AAA(el), AA(el) A(el) BBB(el) BB(el) B(el) CCC(el), CC(el), C(el) Egan-Jones Ratings Co. Long-term credit rating scale AAA, AA A BBB BB B CCC, CC, C, D Short-term credit rating scale A-1+ A-1 A-2 A-3, B, C, D L 407/14 EN Official Journal of the European Union 17.11.2021EuroRating Sp. z o.o. Global long-term rating scale AAA, AA A BBB BB B CCC, CC, C, D Fitch Ratings Ireland Limited Long-term issuer default rating scale AAA, AA A BBB BB B CCC, CC, C, RD, D Corporate finance obligations — long-term rating scale AAA, AA A BBB BB B CCC, CC, C Long-term international Insurer Financial Strength rating scale AAA, AA A BBB BB B CCC, CC, C Derivative counterparty rating scale AAA dcr, AA dcr A dcr BBB dcr BB dcr B dcr CCC dcr, CC dcr, C dcr Short-term rating scale F1+ F1 F2, F3 B, C, RD, D Short-term IFS rating scale F1+ F1 F2, F3 B, C GBB-Rating Gesellschaft für Bonitätsbeurteilung GmbH Global long-term rating scale AAA, AA A BBB BB B CCC, CC, C, D HR Ratings de México, S.A. de C.V. Global long-term rating scale HR AAA(G)/HR HR A(G) HR BBB(G) HR BB(G) HR B(G) HR C(G)/HR D(G) AA(G) Global short-term rating scale HR+1(G)/HR1(G) HR2(G) HR3(G) HR4(G), HR5(G), HR D(G) ICAP S.A. Global long-term issuer rating scale AAA, AA A, BBB BB, B CCC, CC C, D Global long-term issue rating scale AAA, AA A, BBB BB, B CCC, CC C, D INBONIS S.A. Long-term rating scale AAA/AA A BBB BB B CCC, CC, C, D 17.11.2021 EN Official Journal of the European Union L 407/15Japan Credit Rating Agency Ltd Long-term issuer rating scale AAA, AA A BBB BB B CCC, CC, C, LD, D Long-term issue rating scale AAA, AA A BBB BB B CCC, CC, C, D Short-term issuer rating scale J-1+ J-1 J-2 J-3, NJ, LD, D Short-term issue credit rating scale J-1+ J-1 J-2 J-3, NJ, D Kroll Bond Rating Agency Europe Limited Long-term credit rating scale AAA, AA A BBB BB B CCC, CC, C, D Short-term credit rating scale K1+ K1 K2, K3 B, C, D modeFinance S.r.l. Global long-term rating scale A1, A2 A3 B1 B2 B3 C1, C2, C3, D Moody’s Investors Service Global long-term rating scale Aaa, Aa A Baa Ba B Caa, Ca, C Global short-term rating scale P-1 P-2 P-3 NP Nordic Credit RatingAS Long-term rating scale AAA/AA A BBB BB B CCC, CC, C, D, SD Short-term rating scale N-1+ N-1, N-2, N-3, N-4 QIVALIO SAS (formerly Spread Research) Global long-term rating scale AAA, AA A BBB BB B CCC, CC, C, D Global short-term rating scale SR0 SR1, SR2 SR3, SR4, SR5, SRD L 407/16 EN Official Journal of the European Union 17.11.2021Rating-Agentur Expert RA GmbH International long-term credit rating scale AAA, AA A BBB BB B CCC, CC, C, D, E International reliability rating scale AAA, AA A BBB BB B CCC, CC, C, D, E International short-term rating scale RA1+ RA1 RA2, RA3 RA4, RA5, C, D Scope Ratings GmbH Long-term rating scale AAA, AA A BBB BB B CCC, CC,C, D Short-term rating scale S-1+ S-1 S-2 S-3, S-4 Scope Hamburg GmbH Global long-term rating scale AAA, AA A BBB BB B CCC, CC, C, SD, D S&P Global Ratings Europe Limited Long-term issuer credit rating scale AAA, AA A BBB BB B CCC, CC, R, SD/D Long-term issue credit rating scale AAA, AA A BBB BB B CCC, CC, C, D Insurer financial strength rating scale AAA, AA A BBB BB B CCC, CC, SD/D, R Long-term Financial Institution Resolution Counterparty Ratings AAA, AA A BBB BB B CCC, CC, SD,, D Mid-Market Evaluation rating scale MM1 MM2 MM3, MM4 MM5, MM6 MM7, MM8, MMD Short-term issuer credit rating scale A-1+ A-1 A-2, A-3 B, C, R, SD/D Short-term issue credit rating scale A-1+ A-1 A-2, A-3 B, C, D Short-term Financial Institution Resolution Counterparty Ratings A-1+ A-1 A-2, A-3 B, C, SD/D” 17.11.2021 EN Official Journal of the European Union L 407/17

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