New: rating agencies in the Russian way

A July innovation in the field of investment was the introduction of regulatory of rating activity in Russia.

Federal Law of the Russian Federation from July 13, 2015 N 222-FZ "On the activities of credit rating agencies in the Russian Federation, on the amendment of article 76 [1] of the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)" and Repeal of Certain Provisions of Legislative Acts of the Russian Federation" defines the basic concepts of rating activities and the conditions for its implementation in Russia, the procedure of agencies’ accreditation.

Experts relate the emergence of a new federal law with the actions of a number of Western and international agencies at the beginning of 2015, that unnecessarily downgraded Russia. At the same time, for example, the Chinese agency Dagong Global Credit Rating assesses the potential of the Russian economy very high.

Taliya Minullina, Tatarstan Investment Development Agency Chief Executive, said:

"Russian investment legislation on a number of issues is behind the global trend and the law on the rating agencies - a step on the way to improve it. Domestic rating agencies have worked in the past, but today a clear normative regulation at the federal level raises this kind of activity to new heights and investors who are interested in an objective, reasonable estimate, get the additional choices of information that is very important for making a decision: to invest or No, and if so, where and when".

According to the law, "the rating activity in the territory of the Russian Federation has the right to exercise legal entities established in the legal form of business entity, after entering data on such persons in the register of the credit rating agencies by Bank of Russia".

Thus, under the new law with the accreditation of rating agencies works the Central Bank of the Russian Federation. CB does the appropriate register, carries out inspections, regulations and uses other measures of exposure. The minimum amount of agency’s fund should be 50 million rubles. The rating activity is an exceptional work, it can not be combined with others. With regard to non-accredited agencies, they can work in Russia, but when referring to credit ratings in legislation of the Russian Federation may be used only ratings assigned by accredited agencies.

According to the law, the rating agency should ensure the independence of the activities of any political and economic power, to prevent conflicts of interest. At the same time it can not withdraw the ratings assigned by national rating scale, based on the decisions of foreign states or international unions.

Currently, the Russian register of accredited rating agencies includes 9 companies, where also subsidiaries of foreign agencies - Moody's Interfax, LLC "Moody's Eastern Europe", branches Fitch and S & P, the National Rating Agency, PA AK & M, "Rus-Rating", JSC "Rating Agency "Expert RA" and LLC "Group of rating agencies"Expert RA".

The full text of the law can be found on the website of "Russian newspaper": http://www.rg.ru/2015/07/17/reiting-dok.html

Experts’ opinions:

RAEX Managing Director Pavel Samiev: "We commend the bill is very positive, because in the final version  all the proposals of the market were taken into account. Including refined treatments and formulations – what is the rating activity, requirements to the analysts, rights and duties. In the original version it was very blurry, for such sensitive activity as rating, of course, unacceptable. We have given an explanation about the terms and definitions in general, to the conceptual apparatus to conform to international practice, in particular, the European regulator ESMA. As a result, the adopted text of the bill was corrected in terms of formulations and does not contradict either the Civil Code or the international activities standards".

Director of the methodology of the rating agency "Rus-Rating" Elena Nikolaenko: "The law was adopted in the compromise version for the American agencies, saving them the opportunity to work in Russia on the international scale in actually on the same terms, but at the same time giving the regulator the necessary powers to supervise those ratings that are taken internally for regulatory purposes".

The National Rating Agency (NRA) CEO Victor Chetverikov: "The branch has got the clear criteria for the agencies’ activities and building of high-quality and transparent business model. The law and subsequent regulations will enable the agency to carry out activities in accordance with clear criteria which largely repeated international approaches to regulation. Of particular note is the equal treatment in the requirements for global and local agencies. We hope that the law will give new impulse to the development of the branch" (experts quotes are from “Rossiyskaya Gazeta”: http://www.rg.ru/2015/07/07/reitingi.html).

TIDA Press Service