Communication CBFA_2010_24/ Recognition of External Credit Assessment Institutions (ECAIs)

rue du Congrès 12-14 | 1000 Brussels t +32 2 220 53 42| f +32 2 220 54 93 | www.cbfa.be Communication CBFA_2010_24 of 2 December 2010 Recognition of External Credit Assessment Institutions (ECAIs) Scope: Credit institutions and investment firms. Summary/Objectives: Pursuant to the provisions of the Regulation of the European Parliament and of the Council of 16 September 2009 on credit rating agencies, the CBFA has decided to withdraw the ECAI recognition of Rating and Investment Information Inc. with effect from 7 December 2010. Madam, Sir, Pursuant to Article V.12 of the Regulation of 17 October 2006 on the own funds of credit institutions and investment firms, external credit assessments published by ECAIs may only be used by institutions in the calculation of risk-weighted exposure amounts when these bodies have been recognized as eligible by the CBFA. However, under Article 4 of the Regulation of the European Parliament and of the Council of 16 September 2009 on credit rating agencies, credit institutions and investment firms may only use for regulatory purposes credit ratings issued by credit rating agencies established in the Community and registered in accordance with this Regulation. In the case of rating agencies established in third countries, the said Regulation provides for an alternative certification procedure when the regulatory framework has previously been deemed equivalent by the European Commission (which is the case for Japan). However, in order to benefit from this certification, rating agencies established in third countries had to submit their application file to the European Committee of Securities Market Regulators ("CESR") before 7 September 2010. The CBFA was recently informed that Rating and Investment Information, Inc. (or R&I) did not wish, at this stage, to benefit from such a procedure. In this context, the CBFA has decided to withdraw the recognition of R&I as an eligible ECAI.

CBFA_2010_24 of 2 December 2010 2 / 2 CBFA rue du Congrès 12-14 | 1000 Brussels t +32 2 220 53 42| f +32 2 220 54 93 | www.cbfa.be Given the time limits authorized by the aforementioned European Regulation, the withdrawal of the recognition will take effect on 7 December 2010. A communication to this effect has already been published on the R&I website on 7 October 2010. In the meantime, institutions and companies that use credit ratings issued by R&I for regulatory purposes are invited to seek alternatives and to inform, if applicable, the CBFA of the procedures initiated and the planned schedule. Please accept, Madam, Sir, the expression of my best regards. The President, Jean-Paul SERVAIS