Moody’s, a credit ratings agency, is converting its branch located in Stockholm into a subsidiary as the sector is faced with regulatory pressure to have a sufficient number of employees in the European Union after Brexit.
Moody’s is one of the “Big Three” global agencies. Along with Fitch and Standard & Poor’s, It has hitherto operated a huge part of its operations in Europe from a base in London, however, the United Kingdom is scheduled to officially leave the European Union in March 2019.
Last Monday, spokesperson for Moody’s stated: “The registration of our credit rating agency in Sweden reflects the importance of the Nordics as a strategic region for Moody’s.”
She added: “This will enhance our service and support to the debt capital markets across the EU.”
Under the rules of the European Union, the credit ratings for the customers in the bloc can only be issued by agencies that are registered with the European Securities and Markets Authority (ESMA) of the European Union.
The ESMA said that it has “registered” the Stockholm branch of Moody’s, implying that it will now become a fully fledged operation.
The ESMA disclosed: “Moody’s Investors Service (Nordics) AB is based in Sweden and intends to issue sovereign and public finance ratings, structured finance ratings and corporate ratings.
The data from ESMA reveals that Moody’s has a market share of 31 percent in the European Union. The figure is behind the 46 percent of Standard & Poor’s.
Last year, the watchdog of the European Union stated that rating agencies that have their main European offices located in London may have to relocate significant numbers of their employees to other parts of the European Union a part of the preparations for Brexit.
S&P has disclosed that it would establish a new office in Dublin its post-Brexit EU headquarters. Moody’s already established operations in Frankfurt.