The FCA has carried out a multi-firm review of the effectiveness and governance of rating committees at UK Credit Rating Agencies. It found:
- good practices in the role of committees in setting new ratings through a well-governed process, but that in some cases policies could be clearer and where firms had email-based committees, it questioned how firms tested these committee’s effectiveness;
- good practices in collective decision making and adequate representation for complex credits, but it found the Chair was too involved with issuers in some cases;
- good practices in conflicts policies and composition and voting rights of committees, but that in meetings there was generally limited challenge from those who attended remotely.