• BCMstrategy, Inc.

QOTD -- Brexit, Equivalence & credit ratings

Consider it a de facto equivalence decision.

While political leaders negotiate and bicker, regulators at the European Securities and Markets Authority (ESMA) have effectively extended an equivalence decision concerning credit ratings issued by UK-based credit rating agencies....thus ensuring market continuity in January 2021:

The move minimizes financial stability risks in the near-term. But it begs the question of how long EU-based credit rating agencies will continue to endorse UK assessments past 2021 and whether EU-based issuers will start seeking EU-based credit ratings after the Transition Period has terminated.

A comparable de facto equivalence decision was issued with respect to trading venues in the UK:

Scenario analysis designers and risk managers will take note of this development and downshift their market volatility expectations for 1Q2021 accordingly.

This development was discovered today using the PolicyScope Platform. To learn more about how the PolicyScope Platform can help you acquire informational advantages daily, please see additional information HERE.