BANK 4.3.7 Using external credit rating agencies

(1) A banking business firm must use only a solicited credit risk rating determined by an ECRA in determining the risk-weights for the firm's exposures.
(2) A rating is a solicited rating if the rating was initiated and paid for by the issuer of the instrument, the rated counterparty or any other entity in the same corporate group as the issuer or rated counterparty.
(3) The firm must use the ratings determined by an ECRA consistently and in accordance with these rules and its credit risk management policy.


A firm that chooses to use ratings determined by an ECRA for exposures belonging to a class must consistently use those ratings for all the exposures belonging to that class. The firm must not selectively pick between ECRAs or ratings in determining risk-weights.
(4) Unsolicited ratings must not be used except with the written approval of the Regulatory Authority or in accordance with a direction of the authority. The authority may give a written direction setting out conditions that must be satisfied before a firm may use an unsolicited rating.
(5) The firm must ensure that the relevant rating takes into account the total amount of the exposure (that is, the principal and any interest due).
Amended by QFCRA RM/2015-3 (as from 1st January 2016).