"We've been in negotiations with them for a long time now, so we knew that they were going to stay and open branches in Russia," said Deputy Chairperson of the Central Bank Sergey Shvetsov at the Gaidar Forum, reports Rambler News Service.
He also added that the branches will not be able to work with the “national scale.” “There's a law prohibiting the use of the national scale by rating agencies that are not included in the register of accredited ones”, the Deputy Chairman of the Central Bank explained, stressing that this question only concerns branches, not subsidiaries.
The big three rating agencies must determine how they will work in Russia under the new law regarding the assignment of ratings on an international scale by July 13, 2017, Interfax reports. In order for the Central Bank to consider their ratings for regulatory purposes, the agencies must have accredited subsidiaries in Russia.
International rating agencies are forced to give up national scale ratings due to contradictions that exist between Russian legislation and legislation of the countries where they are operating.
At the end of December 2016, it was announced that Fitch had decided to withdraw all ratings of Russian companies on a national scale. In March, Moody decided to discontinue Russian national scale ratings.
National scale ratings are opinions on the relative creditworthiness of issuers and financial obligations in a particular country. National scale is designed for internal use, as its indexes may differ from those estimated on a global scale.