Recital 1

(1)Regulation (EC) No 1060/2009 of the European Parliament and of the Council ⁴ requires credit rating agencies to comply with rules of conduct in order to mitigate possible conflicts of interest, and to ensure high quality and sufficient transparency of credit ratings and the rating process. Following the amendments introduced by Regulation (EU) No 513/2011 of the European Parliament and of the Council ⁵ , the European Supervisory Authority (European Securities and Markets Authority) (ESMA), established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council ⁶ , has been empowered to register and supervise credit rating agencies. This Regulation complements the current regulatory framework for credit rating agencies. Some of the most important issues, such as conflicts of interest due to the issuer-pays model and disclosure for structured finance instruments, have been addressed and the framework will need to be reviewed after having been in place for a reasonable period of time to assess whether it fully resolves those issues. Meanwhile the need to review transparency, procedural requirements and the timing of publication specifically for sovereign ratings was highlighted by the current sovereign debt crisis.