ESMA has fined 3 CRAs in the Fitch group a total of €5,132,500 for a series of failures to comply with the requirements of the CRA Regulation relating to conflicts of interest. It found that Fitch UK, Fitch France and Fitch Spain, all of which were indirectly owned by one individual through a French entity, also had that individual on the boards of 3 entities the CRAs had rated. ESMA found various failings including:
- rating instruments issued by entities on whose board the individual sat
- failing to assess the need to re-rate or withdraw ratings where the individual was on the board
- failing to set a centralised EU wide control level with respects to conflicts and
- failing to disclose conflicts and potential impact on ratings of conflicts
In almost all instances, ESMA found the Fitch entity had been negligent, and imposed fines based on that, and also took into account both aggravating and mitigating factors.