The issue concerns the credit scale that Nordic banks have used in their investment analyses of corporate bonds. These have for a long time been important for medium and smaller sized companies lacking credit ratings in order to gain access to funding in the capital market. The praxis of providing bank's assessment of credit quality by reference to an acknowledged rating scale has given investors the possibility to compare issued bonds.
According to the CRAR, only registered credit rating agencies may issue credit ratings for companies. However, the rule allows an exception for recommendations and investment analyses, and SEB has therefore interpreted the rule to mean that it is permissible to refer to a credit scale in analyses of corporate bonds.
ESMA's ruling entails a narrower interpretation of the exception than SEB's interpretation. ESMA has therefore concluded that SEB is in violation of the CRAR.
SEB will pay the sanction amount and has adjusted its credit reports in accordance with ESMA's ruling. SEB is considering whether it will appeal the ruling.
Read the Press Release from ESMA here.