ESMA fines S&P €1.11 million for failures related to the premature release of credit ratings to the public

The European Securities and Markets Authority (ESMA) issued a public notice stating that it found S&P Global Ratings Europe Limited (S&P) negligently committed infringements of the CRA Regulation and imposed a fine of €1.11 million. Specifically, the Board of Supervisors found that S&P failed to have internal control mechanisms adequate to ensure compliance with its obligations regarding the timely disclosure of credit ratings. This is a violation of Annex III of the Regulation. The investigation was launched in January 2022 following preliminary investigations. ESMA referred the matter to an Independent Investigating Officer who submitted their findings to the Board of Supervisors.
S&P had procedures in place related to the publication of credit ratings and their reporting to ESMA. However, flaws in these procedures and their implementation led S&P to prematurely release ratings before the issuance of securities to which those ratings relate and their announcement to the market. This resulted in inaccurate and out-of-date information being submitted to ESMA. S&P also had shortcomings regarding its compliance function. The Board found that S&P failed to comply with its obligations under the Regulation and disclosed the findings in a non-selective and timely manner.