MOSCOW, August 26 (RIA Novosti) - The Central Bank of Russia (CBR) sent a draft law to ratings agencies stipulating that foreign agencies must register subsidiaries in Russia instead of representative offices and affiliates, the Kommersant newspaper reported Tuesday citing Vladimir Chistyukhin, the deputy governor of the CBR.
“This demand stems from the necessity for the regulator to carry out its supervisory role in regard to ratings agencies irrespective of the origin of their capital. When we are dealing with a foreign company’s affiliate it is difficult to do the supervision,” Chistyukhin said.
According to the newspaper, ratings agencies should provide the CBR with their comments on the draft of the law by the end of the week. The draft was sent out to the agencies last week.
Until now there was no law in Russia regulating ratings agencies. The CBR started working on the law when it was given the function of the country’s major regulator.
Market specialists assume that the decision was partially driven by the sanctions against some Russian companies and decisions by the three large international ratings agencies – Moody’s, Fitch, and S&P – to halt their ratings operations for some entities.
The three ratings agencies refused to comment, but acknowledged receiving the draft, which does not regulate the operations of ratings agencies registered abroad.
Chistyukhin added that Russian companies registered abroad would still have the right to receive ratings from foreign agencies directly, which is also the case now. The law is expected to go into effect on September 1, 2015.