By assessing the creditworthiness of issuers and their debt instruments, rating agencies provide important information which is used both by FINMA and by financial-market participants.
Ratings for regulatory reporting
Supervised institutions can use ratings to meet a number of regulatory requirements. In certain specific cases (e.g. the capital-adequacy calculations carried out by banks), only ratings from agencies recognised by FINMA may be used. The requirements for recognition are set out in FINMA Circular 2012/1 “Rating agencies”. They are designed to ensure that the quality of ratings used for regulatory reporting meets certain minimum standards. FINMA does not, however, guarantee the accuracy or reliability of these ratings.
The standards that FINMA expects rating agencies to meet are based on those defined by the International Organization of Securities Commissions (IOSCO
) and the Basel Committee on Banking Supervision (BCBS
). FINMA’s requirements relate to the objectivity, independence, transparency, disclosure, resources and credibility of the agency and the ratings it produces.
No supervision by FINMA
FINMA has no supervisory authority over the rating agencies it recognises. It can, however, verify at any time whether agencies continue to meet its recognition requirements and can suspend or withdraw recognition if shortcomings are identified.