EN Official Journal of the European Union CE 88/212

(2004/C 88 E/0219)

WRITTEN QUESTION E-0765/04

by José García-Margallo y Marfil (PPE-DE) to the Commission

(11 March 2004)

Subject: Rating agencies and access to privileged information

On the basis of what European legislation are rating agencies able to gain access to privileged information from businesses?

Answer given by Mr Bolkestein on behalf of the Commission

(26 April 2004)

According to Article 3(a) and Article 6(3) first sub-paragraph of Directive 2003/6/EC of the Parliament and the Council of 28 January 2003, on insider dealing and market manipulation (market abuse (1)), an issuer (or a person acting on his behalf or for his account) may disclose inside information to a third party in the normal exercise of his employment, profession or duties. The issuer must make public disclosure of this information simultaneously or promptly except if the person receiving the information owes a duty of confidentiality, regardless of whether such duty is based on a law, on regulations, on articles of association or on a contract. On this basis, credit rating agencies might get access to inside information from issuers if they owe such a duty of confidentiality.

However, as credit rating agencies are not explicitly mentioned in the above-mentioned provisions, their right (or not) of access to inside information from issuers is left, in practice, to Member States. There is no harmonised European legislation on this matter yet, contrary to the United States where officially recognised credit rating agencies may officially have access to such information.

This is the reason why the Member of the Commission who was responsible for Employment and Social Affairs stated, on 9 February 2004 in the plenary debate on the own initiative report of the European Parliament (Rapporteur: Mr Katiforis) on credit rating agencies, that among at least four issues to be resolved regarding credit rating agencies, ‘the legal treatment of the question of access by rating agencies to inside information from issuers is currently unclear in Europe. There is no harmonised European legislation, nor even any regulation at national level. If rating agencies are to have access to inside information from issuers, we should ensure that the same information is available to all rating agencies. I think Mr Katiforis’ report reflects this. (…) We have to take action fast on these (…) issues. The European Commission committed itself to that at the Oviedo European Council in April 2002. We have to respect our commitment before new scandals occur. The European Commission will thus be able to take a position on the subject by the summer or autumn of 2004 at the latest. Among other contributions, Mr Katiforis' report will be an important element to guide us'.

The case of other types of confidential information, which do not answer the specific criteria of the definition of ‘inside information’ of Article 1 point 1 of Directive 2003/6/EC, is neither dealt with by this Directive nor by any other piece of European legislation. Similarly, cases of businesses apart from issuers or persons acting on their behalf or for their account are not regulated at European level.

(1) OJ L 96, 12.4.2003.