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Date: 2021-11-17 Category: Not Applicable State: Union Government Country: Europe

Commission Implementing Regulation (EU) 2021/2006 of 16 November 2021 laying down implementing technical standards amending Implementing Regulation (EU) 2016/1800 as regards the allocation of credit assessments of external credit assessment institutions to an objective scale of credit quality steps in accordance with Directive 2009/138/EC 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) 2021/2006 amends Implementing Regulation (EU) 2016/1800 regarding the allocation of credit assessments of external credit assessment institutions (ECAI) to an objective scale of credit quality steps, as per Directive 2009/138/EC. This update is necessary due to changes in quantitative and qualitative factors underpinning credit assessments, the extension of ECAI assessments to new market segments, the registration/deregistration of credit rating agencies, and amendments to rating scale symbols. The regulation entered into force on the twentieth day following its publication in the Official Journal of the European Union. Key Points / Main Content: * **Amendment of Implementing Regulation EU 2016/1800:** * The Annex to Implementing Regulation EU No 2016/1800 is replaced by the text in the Annex to this regulation. * **Updates to ECAI Mappings:** * Mappings of ECAIs are updated to reflect changes in their credit assessments. * New mappings are provided for newly registered ECAIs. * Mappings for deregistered ECAIs are removed. * Mappings for ECAIs that have amended their rating scale symbols are updated. * **Basis for the Regulation:** * The regulation is based on draft implementing technical standards submitted by the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA), and the European Insurance and Occupational Pensions Authority (EIOPA). * Open public consultations were conducted on the draft standards. Impact Analysis: * **External Credit Assessment Institutions (ECAIs):** * Impact: ECAIs are impacted by the changes to mapping and must adhere to the updated regulations. * Action Required: ECAIs need to be aware of the updated mappings of their credit assessments and ensure compliance. * **European Banking Authority (EBA), European Securities and Markets Authority (ESMA), and European Insurance and Occupational Pensions Authority (EIOPA):** * Impact: The European Supervisory Authorities are responsible for providing the draft implementing technical standards on which this Regulation is based * Action Required: 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; the advice of the Securities and Markets Stakeholder Group; and the advice of the Insurance and Reinsurance Stakeholder Group. * **Insurance and Reinsurance Companies:** * Impact: Insurance and reinsurance companies using external credit assessments are impacted by changes in the mapping of ECAI ratings to credit quality steps. * Action Required: Insurance and reinsurance companies need to adjust their internal models and processes to reflect the updated mappings. * **European Commission:** * Impact: Responsible for adopting the regulation. * Action Required: Ensure the regulation is properly implemented and enforced across all Member States.

Key Entities Referenced

European Parliament: Legislative branch of the European Union. Council of the European Union: A component of the EU legislative branch where government ministers from each EU country meet to discuss, amend and adopt laws, and coordinate policies. Commission Implementing Regulation (EU) 2016/1800: A European Union regulation specifying the correspondence between credit assessments issued by external credit assessment institutions and credit quality steps. Directive 2009/138/EC: A European Union directive on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II). European Banking Authority (EBA): An EU agency that defines regulatory standards and contributes to consistent supervisory practices, ensuring financial stability. European Securities and Markets Authority (ESMA): An EU agency that safeguards stability of the European Union's financial system by enhancing the protection of investors and promoting stable and orderly financial markets. European Insurance and Occupational Pensions Authority (EIOPA): A European Union financial regulatory institution. Its main task is to support the stability of the financial system and protect consumers of insurance and pensions. Brussels: The location where the regulation was adopted.
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L 407/18 EN Official Journal of the European Union 17.11.2021 COMMISSION IMPLEMENTING REGULATION (EU) 2021/2006 of 16 November 2021 laying down implementing technical standards amending Implementing Regulation (EU) 2016/1800 as regards the allocation of credit assessments of external credit assessment institutions to an objective scale of credit quality steps in accordance with Directive 2009/138/EC 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 Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II)(1), and in particular Article 109a(1), third subparagraph, thereof, Whereas: (1) Commission Implementing Regulation (EU) 2016/1800(2) specifies, among other things, in its Annex, the correspondence between the relevant credit assessments issued by an external credit assessment institution (‘ECAI’) and the credit quality steps referred to in Article 3 of Commission Delegated Regulation (EU) 2015/35(3)(‘External credit assessments’). (2) Since the latest amendments, by Commission Implementing Regulation (EU) 2020/744(4), to the Annex to Implementing Regulation (EU) 2016/1800 the quantitative and qualitative factors underpinning the credit assessments of some mappings 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) After the adoption of Implementing Regulation (EU) 2020/744, two credit rating agencies have been registered in accordance with Articles 14 to 18 of Regulation (EU) No 1060/2009 of the European Parliament and of the Council(5), while two other ECAIs for which Implementing Regulation (EU) 2016/1800 provided a mapping have been deregistered. It is therefore necessary 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 (EU) No 1060/2009, and for which a mapping was provided in Implementing Regulation (EU) 2016/1800, 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 EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA) jointly (the European Supervisory Authorities). (1) OJ L 335, 17.12.2009, p. 1. (2) Commission Implementing Regulation (EU) 2016/1800 of 11 October 2016 laying down implementing technical standards with regard to the allocation of credit assessments of external credit assessment institutions to an objective scale of credit quality steps in accordance with Directive 2009/138/EC of the European Parliament and of the Council (OJ L 275, 12.10.2016, p. 19). (3) Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 12, 17.1.2015, p. 1). (4) Commission Implementing Regulation (EU) 2020/744 of 4 June 2020 amending Implementing Regulation (EU) 2016/1800 laying down implementing technical standards with regard to the allocation of credit assessments of external credit assessment institutions to an objective scale of credit quality steps in accordance with Directive 2009/138/EC of the European Parliament and of the Council (OJ L 176, 5.6.2020, p. 4). (5) 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 407/19 (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(6); 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(7); 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(8). (7) Implementing Regulation (EU) 2016/1800 should therefore be amended accordingly, HAS ADOPTED THIS REGULATION: Article 1 Amendment to Implementing Regulation (EU) 2016/1800 The Annex to Implementing Regulation (EU) No 2016/1800 is replaced by the text 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 (6) 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). (7) 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). (8) 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 Allocation of credit assessments of external credit assessment institutions to an objective scale of credit quality steps Credit quality step 0 1 2 3 4 5 6 A.M. Best (EU) Rating Services B.V. Long-term issuer credit ratings scale aaa 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 ratings scale aaa aa, aa- a+, a, a- bbb+, bbb, bbb- bb+, bb, bb- b+, b, b- ccc+, ccc, ccc-, cc, c, d, s Financial strength ratings scale A++, A+ A, A- B++, B+ B, B- C++, C+ C, C-, D, E, F, S Short-term issuer ratings scale AMB-1+ AMB-1- AMB-2, AMB- 4, d, e, f, s AMB-3 Short-term issue ratings scale AMB-1+ AMB-1- AMB-2, AMB- 4, d, s AMB-3 ARC Ratings S.A. Medium- and long-term issuers AAA AA A BBB BB B CCC, CC, C, D rating scale Medium- and long-term issues rating AAA AA A BBB BB B CCC, CC, C, D scale Claims paying ability rating scale AAA AA A BBB BB B CCC, CC, C, R Short-term issuers rating scale A-1+ A-1 A-2, A-3 B, C, D Short-term issues 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 L 407/20 EN Official Journal of the European Union 17.11.2021Short-term corporate rating scale A++ A B, C, D Axesor Risk Management SL 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 3++ 3+, 3 4+ 4, 5+ 5, 6 7, 8, 9, P ratings scale Global NEC long-term issuer credit 1+ 1, 1- 2+, 2, 2- 3+, 3, 3-, 4+, 4, 4-, 5+ 5, 5-, 6+, 6, 6- 7, 8, P rating scale BCRA – Credit Rating Agency AD Global long-term ratings scale AAA AA A BBB BB B CCC, CC, C, D Global short-term ratings scale A-1+ A-1 A-2, A-3 B, C, D Pension-insurance company long- AAA AA A BBB BB B CCC, CC, C, D term scale Pension-insurance company short- A-1+ A-1 A-2, A-3 B, C, D term scale 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 AAA AA A BBB BB B C, RS, SD, D scale International long-term issue rating AAA AA A BBB BB B CCC, CC, C, D scale 17.11.2021 EN Official Journal of the European Union L 407/21International long-term insurer AAA AA A BBB BB B C,RS, SD, D financial strength rating scale International short-term issuer A1+ A1 A2, A3 B, C, RS, SD, D rating scale International short-term issue rating A1+ A1 A2, A3 B, C, D scale International short-term insurer A1+ A1 A2, A3 B, C, RS, SD, D financial strength rating scale Cerved 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 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 L 407/22 EN Official Journal of the European Union 17.11.2021DBRS Ratings GmbH Long-term obligations rating scale AAA AA A BBB BB B CCC, CC, C, D Commercial paper and short-term R-1 H, R-1 M R-1 L R-2, R-3 R-4, R-5, D debt rating scale 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 EuroRating 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 ratings AAA AA A BBB BB B CCC, CC, C, RD, D scale Corporate finance obligations – AAA AA A BBB BB B CCC, CC, C Long-term ratings scale Long-term international IFS ratings AAA AA A BBB BB B CCC, CC, C scale Derivative counterparty ratings AAA dcr, AA dcr A dcr BBB dcr BB dcr B dcr CCC dcr, CC dcr, C dcr scale Short-term rating scale F1+ F1 F2, F3 B, C, RD, D Short-term IFS ratings scale F1+ F1 F2, F3 B, C 17.11.2021 EN Official Journal of the European Union L 407/23GBB-Rating Gesellschaft für Bonitätsbeurteilung mbH 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 HR AA(G) HR A(G) HR BBB(G) HR BB(G) HR B(G) HR C(G)/HR D(G) AAA(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 SA Long-term rating scale AAA AA A BBB BB B CCC, CC, C, D Japan Credit Rating Agency Ltd Long-term issuer ratings scale AAA AA A BBB BB B CCC, CC, C, LD, D Long-term issue ratings scale AAA AA A BBB BB B CCC, CC, C, D Short-term issuer ratings scale J-1+ J-1 J-2 J-3, NJ, LD, D Short-term issue credit ratings scale J-1+ J-1 J-2 J-3, NJ, D Kroll Bond Rating Agency Europe 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 L 407/24 EN Official Journal of the European Union 17.11.2021modeFinance 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 Rating AS 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 Rating-Agentur Expert RA GmbH International long-term credit rating AAA AA A BBB BB B CCC,CC, C, D, E scale 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 AG 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 17.11.2021 EN Official Journal of the European Union L 407/25Scope Hamburg GmbH Global long-term rating scale AAA AA A BBB BB B CCC, CC, C, SD, D S&P Global Ratings Long-term issuer credit ratings scale AAA AA A BBB BB B CCC, CC, R, SD/D Long-term issue credit ratings scale AAA AA A BBB BB B CCC, CC, C, D Insurer financial strength ratings AAA AA A BBB BB B CCC, CC, SD/D, R scale Long-term Financial Institution AAA AA A BBB BB B CCC, CC, SD, D Resolution Counterparty Ratings Mid-Market Evaluation ratings scale MM1 MM2 MM3, MM4 MM5, MM6 MM7, MM8, MMD Short-term issuer credit ratings scale A-1+ A-1 A-2, A-3 B, C, R, SD/D Short-term issue credit ratings scale A-1+ A-1 A-2, A-3 B, C, D Short-term Financial Institution A-1+ A-1 A-2, A-3 B, C, SD/D’ Resolution Counterparty Ratings L 407/26 EN Official Journal of the European Union 17.11.2021

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