Examples of using Structured finance instruments in English and their translations into Slovak
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Information on structured finance instruments.
Structured finance instruments use complex legal and corporate entities to transfer risks.
As you know, CRAs rate three different sectors- the public sector,companies and structured finance instruments.
Under certain circumstances structured finance instruments may have effects which are different from traditional corporate debt instruments. .
This Regulation also lays down obligations for issuers,originators and sponsors established in the Union regarding structured finance instruments.".
Article 8 also deals with the concern that ratings for structured finance instruments are not comparable with ratings for conventional debt instruments. .
Indeed, recent events have opened up the possibility of identifying the failures of their action and of re-examining their status as certifiers of the subjects of their analysis: companies,the public sector, and structured finance instruments.
Therefore credit rating agencies should either usedifferent rating categories when rating structured finance instruments or provide additional information on the different risk characteristics of these products.
Article 8b: this new article requires issuers(or their related third parties) who solicit a rating to engage two credit rating agencies, independent from each other,to issue two independent credit ratings in parallel on the same structured finance instruments.
In addition, two ratings from two different ratingagencies would be required for complex structured finance instruments and a big shareholder of a credit rating agency should not simultaneously be a big shareholder in another credit rating agency.
A credit rating agency shall record all instances where in its credit rating process it downgrades existing credit ratings preparedby another credit rating agency with respect to underlying assets or structured finance instruments providing a justification for the downgrade.
Where an issuer mandates more than one credit rating agency,either because as an issuer of structured finance instruments he is obliged to do so, or on a voluntary basis, it should be sufficient that the strict rotation periods only apply to one of the credit rating agencies.
It seeks to enable investors to distinguish between ratings for structured products and for traditional products( corporate, sovereign)by requiring the use of a different rating category for structured finance instruments or the provision of additional information on their risk characteristics.
The current crisis revealed weaknesses in the methods andmodels used by the agencies to rate structured finance instruments that were financially engineered to give high confidence to investors, and in the agencies» communication with the markets and investors both about the.
This additional information should facilitate that investors, such as UCITS or AIFs, could make their own credit risk assessmentsand need not systematically and mechanically rely on credit rating agencies to assess the creditworthiness of the instruments, in particular structured finance instruments, in which they invest.
Other amendments aim at addressing the risk of over-reliance on creditratings by financial market participants as regards structured finance instruments and at increasing the quality of the credit ratings regarding such instruments: .
In cases where the lack of reliable data or the complexity of the structure of a new type,in particular structured finance instruments, raises serious questions as to whether the credit rating agency can produce a credible credit rating, the credit rating agency should refrain from issuing a credit rating or withdraw an existing credit rating.
The requirements to use external credit ratings in legislation, the excessive use of external ratings for internal risk management by investors, the investment strategies directly linked toratings as well as the insufficient information on structured finance instruments results in overreliance on external credit ratings leading to procyclicality and"cliff" effects9 in capital markets;
Credit rating agencies(CRAs) provide ratings for three different sectors- the public sector,companies and structured finance instruments- and played a significant role in the path that led to the financial crisis, through the assignment of faulty ratings to structured finance instruments, which had to be downgraded on average three to four notches during the crisis.
(2) A credit rating agency must,when issuing a credit rating for a structured finance instrument, ensure that the rating categories that are attributed to structured finance instruments are clearly differentiated, using an additional symbol which distinguishes them from rating categories used for any other entities, securities, financial instruments or issuers.
(PT) Credit rating agencies(CRAs) provide ratings for three different sectors- the publicsector, companies and structured finance instruments- and played a significant role in the path that led to the financial crisis, through the assignment of faulty ratings to structured finance instruments, which had to be downgraded on average three to four notches during the crisis.
Where a credit rating agency is using an existing credit rating or ratings prepared by another creditrating agency with respect to underlying assets or structured finance instruments, it shall not refuse to issue a credit rating of an entity or a financial instrument because a portion of the entity or the financial instrument had been previously rated by another credit rating agency.
The current crisis revealed weaknesses in the methods andmodels used by the agencies to rate structured finance instruments that were financially engineered to give high confidence to investors, and in the agencies' communication with the markets and investors both about the characteristics and limitation of the rating of structured finance instruments and about critical model assumptions.
As recent events have demonstrated, it appears to have rating prepared by another creditrating agency with respect to underlying assets or structured finance instruments, it shall not refuse to issue a credit rating of an entity or a financial instrument because a portion of the entity or the financial instrument had been previously rated by another credit rating.
Credit ratings shall be presented in accordance with the requirements set out in Section D of Annex I. When acredit rating agency issues a rating for structured finance instruments it shall ensure either of the following: a credit rating categories that may be attributed to structured finance instruments are clearly differentiated from rating categories that may be used to rate other types of rated entities or financial instruments; .
In particular, when a structured finance instrument is rated, it shall provide information about the loss and cash flow analysis it has performed.
Where a credit rating agency rates a structured finance instrument, it shall provide in the credit rating information about loss and cash-flow analysis it has performed.
Structured finance instrument" means an instrument resulting from a securitisation transaction or scheme referred to in Article 4(36) of Directive 2006/48/EC;
Structured Finance Instrument” is defined in Article 3(1)(l) of the CRA Regulation as“a financial instrument or other assets resulting from a securitisation transaction or scheme referred to in Article 4(36) of Directive 2006/48/EC”.
Publish a report that provides a detailed description of the rating methodology used to determine the credit rating and an explanation of how it differs from the determination of ratings for any other type of rated entity or financial instrument, and how the credit risk characteristics associated with a structured finance instrument differ from the risks related to any other type of rated entity or financial instrument. .
