European Commission to Endorse U.S., Canadian and Australian CRAs as Equivalent

The European Commission has published draft decisions by which, once finalized, it will recognize the legal and supervisory frameworks of the United States, Canada, and Australia as equivalent to the European Union requirements for credit rating agencies under the Credit Rating Agencies Regulation. This step follows the endorsement of the regimes by the European Securities and Markets Association, which provided the European Commission with technical advice on the equivalence of the regimes in April of this year.

Lofchie Comment: The topic of one country's recognition of another country's regulatory system is of tremendous significance in connection with the implementation of the Dodd-Frank swap rules; various of the non-U.S. regulators have severely criticized the CFTC for the very limited recognition it would give to non-U.S. regulatory schemes.