The European Securities and Markets Authority (ESMA ESMA European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t Read this Term) has hit the European branch of S&P, an American credit rating agency, with a fine of €1.1 million for publishing credit ratings before the concerned securities were issued by the rated firm and announced to the market. The fine also covers two other contraventions relating to S&P’s internal controls and transparency obligations.

ESMA Hits S&P with Three-Fold Fine

ESMA fined S&P Global Ratings Europe Limited €825,000, €210,000 and €75,000, respectively, for the contraventions. The violations negate the Credit Rating Agencies Regulation (CRA Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term), the EU financial market supervisor announced on Friday, noting that the agency could appeal against the decision before the Board of Appeal of the European Supervisory Authorities.

S&P Global Ratings is the credit agency division of S&P Global, a New York-based publicly traded company that specializes in financial information and analytics. The firm covers the stocks, bond and commodities markets in its services. S&P alongside Moody’s Investors and Fitch Ratings are considered the three largest credit rating agencies in the world.

European Regulator Unpacks Breach Allegations against S&P

According to ESMA, flaws in S&P’s internal controls procedures and implementation resulted in the premature release of its credit ratings. For instance, between June 5, 2019, and September 8, 2021, the agency published credit ratings on six issuers before they issued their securities and announced the same to the market, the regulator said it found in its investigation.

“Publishing a credit rating before the issuance of the rated securities may result in harm to the issuer, to investors and more generally to the orderly functioning of the financial markets,” Verena Ross, ESMA’s Chair, noted.

On the breach relating to S&P’s transparency obligations, the financial markets supervisor said it found six cases where the agency yanked off credit ratings from its public portals without prior notice. These instances happened between 2019 and 2021, ESMA said.

On the third breach, ESMA noted that the agency failed to ensure that the information shared by one of its rated entities was correct and up-to-date. This information was shared with ESMA for publication in the European Rating Platform.

“All breaches were found to have resulted from negligence on the part of S&P. In calculating the fine, ESMA considered both aggravating and mitigating factors provided for in the CRA Regulation,” ESMA explained.