mr president as a vice-chair of the committee on legal affairs i would like to present some important aspects that were the subject of the debates and amendments tabled in this committee
firstly at the present time payment for the structured instruments evaluated by the agencies is made by the issuing company
there can be conflicts of interest because the rated companies are interested in having a good rating
alternatively it might be the users of ratings who pay
the users interests are more diverse and therefore there is not a single interest that can lead to a conflict of interest
there are users who prefer a good rating for instance when they want to sell shares and those who prefer a bad rating for instance when they want to buy shares
secondly the regime for the rating agencies could profit from the rules that have been established for the auditors
the rating agencies and auditors have a lot of responsibility for the good reputation of companies and the proper functioning of the market
auditors however seem to be subject to far stricter rules than the rating agencies
thirdly the european securities and markets authority esma should have supervisory competence over the credit rating agencies in order to verify possible material discrepancies between the ratings given by different agencies for the same structured financial instrument
esma should also have greater power of enforcement
fourthly the directive introduces a new principle taken from the latest us legislation
when an agency other than the one contracted to make the valuation can do its valuation for the same instrument it is subject to the contracted valuation
for this the first agency must disclose certain information regarding the valuated instrument
in such a way two beneficial effects are obtained firstly there is a second opinion and secondly the liability that falls on the contracted agency is reduced
finally i want to underline the fact that the provisions of this directive which represents a new regulatory frame should only apply to the structured financial instruments credit rating agencies themselves being an important part of structured finance
the remainder of the financial instruments one hundred and fifty year-old common shares or plain bonds which do not pose a systemic risk should not be part of this directive if you want to be tight but not to over-regulate if you want to be competitive but not expensive in administrative costs and if you want to hold capital in europe and not drive it away to the emerging markets abroad
