Local rating agencies angle for spot on global stage

viernes 14 de febrero de 2014 10:57 GYT

* ESMA rule opens window for alternatives to Big Three

* New players face uphill battle in entrenched marketplace

* Investors suggest newcomers offer little added value

By Christopher Langner

SINGAPORE, Feb 14 (IFR) - New rating agencies in Asia are hoping to launch themselves on the global stage thanks to a little known rule change by a European regulator made several years ago.

The European Securities and Markets Authority created Regulation 1060 in the wake of the global financial crisis in 2009. Officials across the globe were frustrated that rating companies had not done more to warn investors of impending problems in certain debt instruments.

The ESMA regulation suggested issuers that require two ratings choose at least one agency with less than 10% of the European market. Standard & Poor's and Moody's each have nearly 35% of the market in Europe, while Fitch has nearly 18%, according to December ESMA data.

"This means that issuers have to consider alternative rating agencies," said Alan Reid, managing director for Dominion Bond Rating Service in Europe. "It creates some opportunity in a highly competitive market dominated by two agencies," he added.

DBRS, for one, holds only 0.97% of the market, while two new entrants, Arc and Dagong Europe (part of UCRG), have just 0.04% and 0.01% respectively.   Continuación...