In 2009, the European Union (“EU”) enacted legislation regulating credit rating agencies (“CRAs”) in order to address the criticisms raised during the financial crisis that highlighted certain issues arising from conflicts of interest and a lack of transparency in the ratings process.1

The EU Regulation on Credit Rating Agencies (the “CRA Regulation”) came into force on 7 December 2009, introducing new obligations on CRAs designed to improve the independence, quality and transparency of ratings.2 CRAs operating in the EU are subject to registration in order for their ratings to be used for regulatory purposes in the EU. Along with other EU member states, the United Kingdom (“UK”) has proceeded to implement the CRA Regulation by passing the UK Credit Rating Agencies Regulations 2010, which will come into effect 7 June 2010.3

Recently, however, CRAs have been back in the spotlight for their role in the ongoing sovereign debt crisis in the Eurozone, particularly in relation to their decision to downgrade the credit ratings of Greece, Portugal and Spain.