KOMMERSANT. The Central Bank of Russia intends to shift to a new model of using ratings for regulatory purposes, namely when funds are invested in private pension funds, mortgage credit is granted to servicemen, securities are included in the Lombard List, etc. In these cases right now an issuer's credit rating is taken into account, while the new approach implies the use of the ratings assigned to securities. The Bank of Russia believes that the new approach will raise the degree of transparency and improve investor protection, business daily Kommersant wrote.
The new approach towards the application of ratings for regulatory purposes was talked about at the latest expert council in charge of credit rating agencies at the Bank of Russia. The regulator confirmed these plans, saying such approach is widespread worldwide, being a tool for more accurate assessment of investment risks.
According to ACRA head Ekaterina Trofimova, it is correct to apply the type of a rating pertaining to the type of an obligation in which the money is invested. "Otherwise this will lead to a possibility of the risks being underestimated, asymmetry of information in the market, and rating arbitrage," she emphasized. According to her, individualizing credit ratings for instruments will make it possible to improve investment quality and cut potential investor losses.
Changes in the regulation will probably start in late 2017 or early 2018, sources close to the expert council told the paper. "While the shift towards the application of ratings for regulatory purposes potentially implies additional costs for issuers, this should be carried out not instantly, but in a gradual manner, including given the tariff policies conducted by rating agencies," the Bank of Russia's press service said.
The new rules will be first applied to the issues of complicated instruments (securitized loans, structured bonds) where there is a higher probability that the rating of an issue will substantially differ from an issuer's rating, the Bank of Russia pointed out. Meanwhile, it was decided to work out approaches to rate bond programs in order to cut issuers' costs. These and other details of the shift to the new rules will be discussed at a meeting of the next expert council, the press service said.
