A.M. Best has been registered as a credit rating agency (CRA) by the European Securities and Markets Authority (ESMA) to provide ratings through its new Amsterdam-based subsidiary as part of its Brexit contingency plan.
A.M. Best (EU) Ratings Services will, effective 3 December 2018, enable the ratings agency to continue to provide ratings to be used for regulatory purposes post-Brexit across the EU member states.
Currently, A.M. Best’s London-based subsidiary, A.M. Best Europe–Rating Services, is registered with ESMA in Paris, which authorises it to provide rating services across the EU on a cross-border basis.
Though the specifics of the Brexit negotiations remain uncertain, it appears extremely likely that the UK will lose passporting rights when it exits the EU in March 2019.
The new Amsterdam-based subsidiary means A.M. Best will continue to be able to provide ratings in the EU following that date.
The ratings agency’s London office will continue to function as its hub for the Europe, Middle East, and Africa (EMEA) region, and plans to be registered with the UK Financial Conduct Authority which is assuming responsibility for the UK-based credit rating agencies post-Brexit.
Roger Sellek, chief executive of A.M. Best’s EMEA and Asia Pacific operations, welcomed news of the successful ESMA application, and noted that it enables the agency to “prepare for any kind of Brexit outcome, to ensure continuity of our rating services for our clients”.
Nick Charteris-Black, managing director of market development for A.M. Best EMEA, commented: “The Amsterdam office reinforces A.M. Best’s ambitious growth agenda for continental Europe and demonstrates our commitment to providing continuity of rating services throughout the EU post-Brexit whilst developing our coverage in other international markets across the broader EMEA region from London.’’
A.M. Best’s plans may be adapted in light of any future developments, such as the outcome of transitional arrangements that may be agreed between the UK and the EU.
