Remuneration and reporting lines
Remuneration and reporting lines Guidance
Credit Rating Agencyis required, pursuant to GEN Rule 5.3.31, to have remuneration structures and strategies which, amongst other things, are consistent with the business objectives and identified risk parameters within which the firm operates, and provide for effective alignment of risk outcomes and the roles and functions of the relevant Employees. The requirements set out in this section are designed to augment those remuneration requirements set out in GEN.
Credit Rating Agencymust ensure that Employeesinvolved in the provision of Credit Ratingshave reporting lines and remuneration arrangements that are designed to eliminate, or effectively manage, actual and potential conflicts of interest.
COB 8.6.6 COB 8.6.6
Credit Rating Agencymust ensure that its Employeesare not remunerated, or their performance evaluated, based on the amount of revenue generated or expected from the Credit Ratingsin which the Employeewas involved.
COB 8.6.6 Guidance
Employeesintended to be covered by this Rule are Rating Analystsand other Employeeswho are directly involved in producing or reviewing a Credit Rating, or who are able to influence the credit rating process (such as the senior management).
Credit Rating Agencymust conduct formal and periodic reviews of its remuneration policies and practices relating to Employeeswho participate in, or who might otherwise have an effect on, the rating process to ensure that those policies and practices do not compromise the objectivity of the Credit Rating Activities.