NEW YORK & LONDON--(BUSINESS WIRE)--Link to Fitch Ratings' Report: Global Non-Bank Financial Institutions
Rating Criteria
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=884128
Following market consultation on an exposure draft, Fitch Ratings has finalized its 'Global Non-Bank Financial Institutions Rating Criteria' applicable to securities firms, investment managers, business development companies, finance and leasing companies, and financial market infrastructure companies.
No rating changes have arisen as a result of the finalization of the criteria report.
As highlighted in the exposure draft, the changes reflected in the criteria include the consolidation of several previous sub-sector criteria reports, the expansion of financial ratio benchmarks by the non-bank financial institution (NBFI) sub-sector and incorporation of Fitch's corporate governance framework.
The NBFI criteria consolidates the previous sub-sector criteria entitled 'Financial Market Infrastructure Companies Criteria' dated March 2015 and 'Criteria for Rating U.S. Mortgage REITs and Similar Finance Companies' dated February 2015. Both of these previous sub-sector criteria reports have been withdrawn.
The updated criteria also provide an expanded suite of financial ratio benchmarks by sub-sector. The benchmarks indicate typical ranges, by rating category, for financial ratios related to asset quality/performance; earnings and profitability; capitalization and leverage; and funding, liquidity and coverage.
Fitch has also fully incorporated its approach to assessing NBFIs' corporate governance in the criteria. Accordingly, the criteria no longer incorporate by reference the separate cross-sector criteria report 'Evaluating Corporate Governance.' Fitch's approach to assessing corporate governance in NBFIs has remained largely unchanged and continues to focus on supervisory board effectiveness, financial reporting, and related party transactions.
In finalizing the NBFI criteria, Fitch did not make material changes to the content of the NBFI exposure draft, but did add clarifying language with respect to investment managers, investment companies and investment funds in order to provide greater clarity on points of analytical differentiation between these types of entities.
Fitch has also published a Special Report entitled 'Feedback Report: Global Non-Bank Financial Institutions Rating Criteria', which summarizes the one written response received on the exposure draft and Fitch's responses to this feedback. Fitch would like to thank market participants for their input.
Fitch reviews its rating criteria annually, in line with its policies and procedures and with applicable regulations.
Additional information is available at www.fitchratings.com.
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