The Board of the International Organization of Securities Commissions (IOSCO) has published a report titled Other CRA Products (OCPs), which provides market participants with a better understanding of certain non-traditional products and services offered by credit rating agencies (CRAs).
These non-traditional products may include, for example, private ratings, confidential ratings, expected ratings, indicative ratings, prospective ratings, provisional ratings, preliminary ratings, one-time ratings, regional ratings, national ratings, point-in-time ratings, scoring, credit default swap spreads, bond indexes, portfolio assessment tools, credit assessments, rating assessments, assessments, fund ratings, data feeds, research or other tools.
Although OCPs and services are distinct from commonly identified issuer-paid or subscriber-paid traditional credit ratings, they may be used by market participants to make investment and other credit-related decisions. Issuers and obligors may also use them to make decisions about whether to obtain a traditional credit rating from a particular CRA.
The final report on OCPs describes six groups of OCPs and their current status, as well as business practices and trends within the CRA industry. The report concludes that OCPs should be responsive to the spirit of the four high level objectives set forth in the IOSCO Principles Regarding the Activities of Credit Rating Agencies and which relate to the quality and integrity of the rating process; independence and conflicts of Interest; transparency and timeliness of ratings disclosure; and confidential information.
Secondly, it observes that the legal and/or corporate organizational structures chosen by CRAs to engage in an activity or offer a service or product are not indicative of whether they are subject to the Code of Conduct.
In November 2016, IOSCO published a consultation report with a view to report on IOSCO´s understanding of OCPs.