Les conflits d’intérêts dans le règlement agence de notation du 16 septembre 2009

In 2009, it was the first time that a European text laid down rules for credit rating agencies. Already at that period of time, the regulation of 16 September 2009 included provisions concerning conflicts of interest : whereas 27 à 29, articles 6 et 7 ? article 7 is about conflicts of interest although its provisions are not covered by article 6 that aims at them expressly ? and annex 1. The legal framework was modified by the regulations of 11 May 2011 and 21 May 2013 ? articles 6a and 6b come from the text published in 2013 ? in order to strengthen the provisions concerning prevention. It is complemented, as regards conflicts of interest, by one of regulations of 21 March 2012 and highlighted by ESMA that published a Question and Answer in December 2013. Paradoxically, the amended regulation of 16 September 2009 doesn?t define the notion of conflicts of interest. Therefore, there are some difficulties in determining the concept and its foundations. Is independence?s preservation at the basis of the framework concerning conflicts of interest ? The issue is to know whether the approach on which is based the legislation concerning Credit rating agencies is specific. Credit rating agencies are required to prevent conflicts of interest or to manage them when they are unavoidable. Prevention and management are the leitmotivs that dominate legislation policy. Article 6 of the Regulation of 16 September 2009 and its annex contain provisions concerning the agency itself, its senior management, shareholders and analysts. Information and bans are part of the legal framework. For instance, Credit rating agencies must put in place policies and procedures to manage conflicts of interest. The administrative or supervisory board must ensure that conflicts of interest are properly identified, managed and disclosed. Rating analysts? agency, its employees and any other natural person whose services are placed at its disposal or under its control and who are directly involved in credit rating activities are not allowed to initiate or participate in negotiations regarding fees or payments with any rated entity, related third party or any person directly or indirectly linked to the rated entity by control. Likewise, the same people must not buy or sell or engage in any transaction in any financial instrument issued, guaranteed, or otherwise supported by any rated entity within their area of primary analytical responsibility other than holdings in diversified collective investment schemes, including managed funds such as pension funds or life insurance. The dichotomy between the articles of the regulation and its annex may surprise because the latter lays down, just as much the former, rules with the result that one may have difficulties in making out criteria that justify such a dichotomy. However, this point is not the most important. The only relevant question is about the effectiveness of the legal framework. Is it sufficient to prevent and manage effectively conflicts of interest ? Is the regulation enable to restore the market confidence ? Such a confidence also depends on other factors with the result it is rather difficult to give an answer. As for the question concerning prevention and management of conflicts of interest, the legal framework, that seems to be compliant to IOSCO principles, is interesting but complex. Consequently, it is not surprising that ESMA has already given some explanations in its Question and Answer published the 17 December 2013. That doesn?t imply that the legislation is of poor quality. However, as a conclusion, I would like to remind you that honesty couldn?t be brought about by decree with the result that a regulation, even of high quality, can be diverted from its original aim.