EU penalizes Fitch with EUR 1.38 million

The European Securities and Markets Authority (ESMA) has penalized the rating agency Fitch with EUR 1.38 million for violating the 28-article regulation on credit rating agencies.

ESMA has determined that certain senior analysts had been transferring information to certain senior persons in a parent company of Fitch about upcoming rating actions before it was made public, the announcement says.

The regulatory authority has found that, in 2012, the information on the downgrade of the credit ratings of Greece, France, Ireland, Italy, Portugal and Spain had been transferred to Fitch’s parent company before it was made public.

In addition to that, ESMA has found that Fitch doesn’t have sound internal controls which are supposed to determine whether the agency has allowed a minimum time period to the subject rated to consider and respond to the rating decision before it is made public.

Namely, in January 2012, Fitch failed to allow Slovenia a minimum of 12 hours to respond to the downgrade of its sovereign credit rating before publishing the decision. Instead, Fitch informed Slovenia of the downgrade only three hours before the publication, the announcement says.

According to ESMA, Fitch has taken steps towards changing its practice, so that similar violations wouldn’t occur again, which was taken into consideration in assessing the level of the fine.

Fitch Ratings New York

credit rating

European Securities and Markets Authority

ESMA