The European Securities and Markets Authority (ESMA), the EU's financial markets regulator, has fined Scope Ratings GmbH €2,197,500 and issued a public notice stating that it had breached the Credit Rating Agency Regulation (CRA Regulation).

ESMA found that Scope failed to meet the requirements of the CRA Regulation to address conflicts of interest. This finding stemmed from structural failures and specific breaches of the CRA Regulation's conflict of interest obligations.

The fine relates to five violations specifically:

• structural weaknesses in Scope's policies and procedures, internal control mechanisms and organisational and administrative arrangements;
• The other two specific breaches related to Scope's failure to address a potential conflict of interest relating to a particular individual;
• Failure to disclose in the final rating report the provision of ancillary services to the rated entity.

All of the breaches were found to be the result of Scope's negligence. In calculating the fines, ESMA took into account the aggravating and mitigating factors set out in the Regulators' Regulations.