The European Securities and Markets Authority (ESMA) published a Consultation Paper on draft Regulatory Technical Standards (RTS) under the ESG Rating Regulation at the beginning of May.
ESMA is the EU’s financial markets regulator and supervisor.
The draft RTS cover the following aspects that apply to ESG rating providers:
- What exact information should be provided in the applications for authorisation and recognition.
- The measures and safeguards that should be put in place to mitigate risks of conflicts of interest within ESG rating providers who carry out activities other than the provision of ESG ratings.
- The information that they should disclose to the public includes rated items and issuers of rated items, as well as users of ESG ratings.
The move aims to enhance transparency, reduce conflicts of interest, and strengthen the credibility of sustainability data across Europe.
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