Press Release

DBRS Credit Ratings Available for Regulatory Use in the EU

July 29, 2011

Credit ratings produced by DBRS outside the European Union (EU) can continue to be used for regulatory purposes in the EU until registration and for a period of three months thereafter according to the European Securities and Markets Authority's (ESMA) Guidelines on endorsement issued on May 18, 2011 (http://www.esma.europa.eu/popup2.php?id=7590).

DBRS has submitted an application to the Committee of European Securities Regulators (CESR, which has since been replaced by ESMA on January 1, 2011) for the registration of its London-based entity, DBRS Ratings Limited. In its application, DBRS requested the ability to endorse credit ratings issued by its non-EU entities, DBRS, Inc. (U.S) and DBRS Limited (Canada) through its London entity in accordance with Article 4(3) of the Regulation (EC) No 1060/2009 on Credit Rating Agencies (CRAs).

It should be noted that since 2007, DBRS has been recognized as an eligible External Assessment Credit Institution (ECAI) in the EU for regulatory use of its ratings.*

DBRS anticipates conclusion of the EU registration process by the Fall of 2011 in line with timing for global credit rating agencies.

As outlined in a press release accompanying ESMA’s Guidelines (http://www.esma.europa.eu/popup2.php?id=7589), EU CRAs can continue to issue credit ratings produced outside the EU after June 6, 2011 at least until the point of registration. If at the point of a CRA’s registration, credit ratings issued outside the EU are not considered endorsable in the EU, because an appropriate regulatory regime has not entered into force in the relevant third country (or the other necessary conditions as set out in the Regulation are not in place), the use of such credit ratings for regulatory purposes by financial institutions will still be possible for three months from that date.

ESMA will assess whether the use of such credit ratings can continue for another three month period, in order to avoid the potential for market disruption or financial instability.

To date, Japan is the only jurisdiction recognised as equivalent by the EU Commission.

Once authorized, DBRS plans to clearly disclose credit ratings that are available for regulatory use in the EU in its credit rating action press releases, ratings reports and data feeds.

DBRS has its headquarters in Toronto, with offices in New York, Chicago and London, and covers entities worldwide.

Notes:

  • DBRS has also been an eligible ECAI in the Eurosystem Credit Assessment Framework (ECAF) by the European Central Bank since January 1, 2008. The ECAF defines the procedures, rules and techniques to ensure the Eurosystem requirement of high credit standards for all eligible assets to be used by counterparties in Eurosystem credit operations is met.

MEDIA CONTACT
Caroline Creighton
Senior Vice President,
Communications
+1 416 597 7317
ccreighton@dbrs.com

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