The EU’s financial market regulator and supervisor, the European Securities and Markets Authority (ESMA) fined Scope Ratings GmbH a total of €2,197,500 and issued a public notice, for breaches of the Regulation on Credit Rating Agencies (Regulation CRA).
ESMA found that the scope falls short of the requirements of the CRA Regulation for the management of conflicts of interest. This finding resulted from structural failures and specific breaches of the conflict of interest obligations in the CRA Regulation.
The five offenses covered by the fine are specifically:
- structural deficiencies in Scope’s policies and procedures, internal control mechanisms and organizational and administrative arrangements;
- two further specific violations related to Scope’s failure related to a potential conflict of interest relating to a specific individual; and to disclose in the final assessment report the provision of ancillary services to an assessed entity.
All violations were found to be negligent on the part of Scope. When calculating the fine, ESMA took into account both the aggravating and mitigating factors provided for in the CRA Regulation.