PORTUGAL Law and Practice Contributed by: Benedita Aires and Orlando Vogler Guiné, VdA
Prospectus Directive), disclosure must be through a regulated securitisation repository; and • for private transactions, disclosure may be done through a repository but can also be done privately. 4.5 Activities of Rating Agencies After the outbreak of the financial crisis, legisla - tion was published at the EU level to regulate rat - ing agencies, the first of which was Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (CRAs) (the “CRA Regula - tion”). This legislation applies to their activities in general, including their rating of securitisations. The first CRA Regulation was passed in 2009, and there have since been two substantial amendments. There is also the so-called CRA III framework, including the CRA III Regulation (Regulation 462/2013) and the CRA III Direc - tive (Directive 2013/14/EU), which entailed sig - nificant amendments to the CRA Regulation on issues such as the reliance of firms on external credit ratings, sovereign debt ratings, competi - tion in the CRA industry, the civil liability of CRAs and the independence of CRAs. Regulated investors may only rely on ratings issued by rating agencies that are registered with ESMA or endorsed by a rating agency that is registered with ESMA. The three big rating agencies all have registered entities in the EU, and there are several other registered agencies, including DBRS Morningstar. CRA III has introduced a requirement establish - ing that any issuer or related third party (such as sponsors and originators) that intends to solicit a credit rating of a structured finance instru - ment must appoint at least two CRAs to provide
independent ratings, and should also consider appointing at least one rating agency holding no more than a 10% total market share (a small CRA), provided that a small CRA is capable of rating the relevant issuance or entity. ESMA is ultimately in charge of registering and supervising rating agencies and their relevant rules, with any breaches possibly leading to sanctions, including fines. It should be noted that a failure to comply with certain requirements may also prevent regulated investors investing in securities that are not duly rated in accordance with the CRA, or make it more burdensome for them to do so. 4.6 Treatment of Securitisation in Financial Entities Under the so-called CRD IV framework (Capi - tal Requirements Directive IV, which includes the Capital Requirements Regulation, or CRR), institutions are subject to the holding of regula - tory capital against their RWAs. In this context, the CRR specifically addresses securitisations. Similar concepts will be found under the Alterna - tive Investment Fund Managers Directive frame - work for other regulated entities, such as alter - native asset managers, including hedge funds, or under the Insolvency II Directive framework for insurance and reinsurance undertakings. The CRD IV framework has been amended by Directive (EU) 2019/878 of the European Parlia - ment and of the Council of 20 May 2019, and implemented in Portugal by Law No 23-A/2022, of 9 December 2022. Regulation (EU) 2017/2401 of 12 December 2017 has consolidated certain sections of the above legislative acts, and shall also be considered. In respect of credit institutions in particular, the treatment of off-balance sheet securitised
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