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Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

You are viewing the version of the document as on 2021-01-01.

Status: In this content, we have included all amendments made by EU exit-related instruments up to end September 2020. There will be more amendments to be made later this year, further to the September QCP.

ANNEX IX PROGRAMME OF OPERATIONS (Article 23)

Business concept/Business development

  1. (1)

    The following information regarding the CRA’s business activities:

    1. (a)

      a description of the macroeconomic environment in which the credit rating agency is expected to operate;

    2. (b)

      an indication of future plans for the establishment of subsidiaries or branches and their location; and

    3. (c)

      a description of the business activities which the credit rating agency plans to carry out, specifying the activities of subsidiaries and branches. The information shall include classes of credit ratings, potential clients and non-rating activities.

Class of credit ratings

  1. (2)

    The following information regarding the class of credit ratings:

    1. (a)

      details of whether the credit rating agency plans to produce solicited or unsolicited ratings or both;

    2. (b)

      for each class of credit ratings planned to be issued by the credit rating agency, an estimation on the proportion of public ratings and private ratings:

    3. (c)

      the number of public/sovereign ratings;

    4. (d)

      the number and volume (in billions of pounds sterling) of structured finance ratings;

    5. (e)

      the number and volume (in billions of pounds sterling) of corporate ratings, with the following detail: financial institutions, insurance, corporate issuers; and

    6. (f)

      the average number of credit ratings produced or monitored per employee presented by class of credit rating.

Financial plan

  1. (3)

    Projections for:

    1. (a)

      balance sheet; and

    2. (b)

      income statement.

  2. (4)

    The credit rating agency shall separate the revenues of the rating activities from the ancillary services in the projections for the revenues. If the credit rating agency has, or plans to establish, branches, the revenue from each branch shall be indicated.

Corporate governance

  1. (5)

    Number of members of the following bodies:

    1. (a)

      the board; and

    2. (b)

      independent members of the board.

Outsourcing

  1. (6)

    A description of the activities planned to be outsourced, and identification of the entities to which the activities are planned to be outsourced and an explanation of the reasons for outsourcing. If any activity is outsourced from a branch, this should be indicated.

Human Resources/Staffing

  1. (7)

    Number of permanent and temporary employees working for the following functions and their seniority:

    1. (a)

      senior management other than members of the board and persons appointed to direct the branches;

    2. (b)

      audit function;

    3. (c)

      internal control mechanism;

    4. (d)

      compliance function; and

    5. (e)

      review function.

  2. (8)

    The following information:

    1. (a)

      the number of employees per functions/departments;

    2. (b)

      the number of temporary employees and the number of permanent employees contracted to the credit rating agency and involved in the rating business;

    3. (c)

      the number of temporary employees and the number of permanent employees contracted to the credit rating agency involved in the ancillary services;

    4. (d)

      the number of employees approving ratings, such as committee chairs, rating analysts and lead rating analysts, together with information on:

      1. (i)

        their seniority or rank;

      2. (ii)

        the type of rating analyst including, where relevant, whether the employee is a primary or surveillance analyst and a qualitative or quantitative analyst; and

      3. (iii)

        the number of years of experience in the credit rating agency, or rating industry where available.