European Securities and Markets Authority fines Moody’s Germany EUR 2.145 million and issues public notice over four CRA Regulation breaches

The European Securities and Markets Authority has fined Moody’s Deutschland GmbH a total of EUR 2,145,000 and issued a public notice after finding four negligent breaches of the Credit Rating Agencies Regulation. The case concerned incomplete, inaccurate and outdated data submitted to ESMA, including reporting to the European Rating Platform and ESMA’s central repository of historical performance data, as well as deficiencies in Moody’s Germany’s policies, procedures and internal control mechanisms for regulatory reporting. The errors affected only data submitted to ESMA, including where Moody’s Germany reported on behalf of other credit rating agencies in its group, and did not affect credit ratings published on Moody’s Germany’s website. The fines comprise EUR 292,500 for failures to submit up-to-date rating information to ESMA, EUR 202,500 for incomplete or inaccurate historical performance and rating change data, EUR 825,000 for inadequate policies and procedures, and EUR 825,000 for weaknesses in internal controls and risk assessment. ESMA identified repeated reporting failures including missing ratings and rating actions, ratings that should have been withdrawn, incorrect or missing data fields, and incorrect CEREP flags that affected central repository statistics. It also found that the main reporting documents lacked clear allocation of responsibilities, were not properly updated or validated, and did not establish an effective error-correction process, while the control framework lacked adequate checks, clear accountability and complete documentation. Moody’s Germany may appeal the decision to the Board of Appeal of the European Supervisory Authorities.