A EU watchdog fined € 5.13 million by Fitch

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By Huw Jones

LONDON, March 28 (Reuters) – The European Union's market watch body has sentenced the credit rating agency Fitch to a record fine of 5.13 million euros. (5.78 million euros) for violation of the rules to avoid conflicts of interest.

The European Securities and Markets Authority (ESMA) said Thursday that between June 2013 and April 2018, 20% of Fitch's subsidiaries in Britain, France and Spain were indirectly owned by an individual via a entity in France.

At the same time, the shareholder, which ESMA did not appoint, sat on the board of directors of three entities rated by the three Fitch subsidiaries, the third rating agency of the block.

Fitch said that none of these violations had any impact on the outcome of his ratings and that his interpretation of the EU's disclosure rules for identity shareholders was made in good faith.

"We no longer have individual shareholders who may be able to sit on the board of directors of rated entities," Fitch said in a statement.

Fitch belongs to the American publisher Hearst after buying shares in the capital of Fimalac in France. It is one of the "Big Three" rating agencies, alongside Standard & Poor's and Moody's which dominate the sector globally.

ESMA authorizes and regulates rating agencies in the EU. Its fine reflects voluntary measures taken by Fitch's three subsidiaries to prevent similar offenses from being committed in the future.

Fitch accounts for 15.1% of the credit ratings market in the EU, ranking third after S & P with 46.3% and Moody's with 32%.

ESMA fined Fitch EUR 1.4 million in July 2016, after discovering that some agency badysts had pbaded information on certain sovereign ratings to officials of Fitch's parent company before publication.