The EBA’s general approach as disclosed by the consultative document is broadly sound and sensible. There is however some concern over how the fourth part of their suggested test (the “risk factors”) would work. In particular, PCS has some concerns over how issuers, investors and third party certification agents will be able to achieve a sufficient level of confidence in the choice of the relevant risk factor or risk factors. Our response does provide a possible solution which we think is both workable and reasonable. In addition, PCS has suggested some clarification regarding some key terms.
PCS has also filed a response to the ESMA’s consultation on the information to be provided by entities seeking to be regulated as third party certification agents. Since PCS has made no secret of its intention to become such a regulated third party certification agent, we have a direct interest in the outcome of this particular consultation. As with the EBA consultation on homogeneity, PCS feels ESMA’s overall approach is sound and our response is mainly concerned with technical aspects.