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On 20 June 2013, the European Regulation known as CRA3 (“CRA3”) came into force. CRA3 not only amends the European regulatory framework for credit rating agencies (“CRAs”), but also contains certain important obligations for issuers, originators and sponsors.
CRA3 introduces the following new provisions:
a requirement to appoint at least two CRAs in respect of rated structured finance instruments;
a requirement to consider appointing at least one small CRA;
a joint obligation for issuers, originators and sponsors of structured finance instruments to publish certain information in relation to the underlying assets and the transaction;
measures intended to reduce over-reliance on credit ratings; and
rotation requirements for CRAs in relation to re-securitisations,