The European Securities and Markets Authority fined FitchRatings Ltd. about €1.4 million for breaching the EU's rules on credit ratingagencies.
According to the regulator, the rating agency violated the EU'srules on unauthorized disclosure on new and potential sovereign rating changesbetween Dec. 1, 2010, and June 7, 2012, when it communicated information onimpending actions to certain senior executives in a parent company prior tomaking them public.
The regulator also noted that the agency lacked internalcontrols, owning to unclear guidance to staff and lack of supervision, toensure that a rated entity was given the required 12-hour period to considerand respond to a ratings action before Fitch made it public. According to theregulator, the agency in January 2012 gave Slovenian representativesinformation on an intended downgrade just three hours before the publicannouncement.
ESMA said Fitch has taken measures to ensure similarinfringements do not occur in the future and that this was taken into accountwhen assessing the level of the fine.