Fitch drops brand in India on EU norms

MUMBAI: Fitch Ratings on Thursday launched a new brand for its local ratings business in India - 'India Ratings & Research Pvt Ltd' (India Ratings) - in order to comply with new European regulations.
According to directions from the European Securities and Markets Authority (ESMA), Fitch Ratings may only endorse ratings from Fitch's non-European Union agencies if the lead analyst is based in a country where ESMA considers the requirements of the credit rating agency regulation in place in such country to be as stringent as the EU Regulation, and where ESMA has put in place a cooperation agreement with the relevant third country regulator."The EU does not endorse Indian regulation," said Brett Hemsley, head of Fitch's Asia-Pacific operations.
In the case of other international agencies, such as Moody's and Standard & Poor's, their domestic operations are through local affiliates Icra and Crisil respectively. Fitch was the only international rating agency that operated globally and locally under the same brand. From now, 'India Ratings' would be dedicated to the local Indian market and focus exclusively on national-scale, domestic credit ratings. Also, all Indian national-scale ratings previously assigned by Fitch Ratings have been transferred to India Ratings.
At the international ratings of Indian banks, corporates and other entities will continue to be assigned under the Fitch Ratings brand and reflect Fitch's global policies and procedures.
"We believe issuers, investors and other market participants will benefit from this move as it will sharpen the focus of the group's analytical coverage, increase transparency, and allow us to keep abreast of domestic and international regulatory changes." said Hemsley.