EU ratings watchdog says competition still patchy

LONDON, Oct (HKSE: 3366-OL.HK - news) 2 (Reuters) - Attempts to boost competition in credit ratings has made little impact in parts of the European Union and stronger enforcement powers are needed, the sector's regulator said on Friday.

The European Securities and Markets Authority (ESMA) regulates 24 ratings agencies currently authorised in the EU, a sector dominated by the "Big Three", Moody's, Fitch and Standard & Poor's.

ESMA was asked by the EU's executive European Commission for advice for a review of EU laws governing rating agencies.

"The high fees charged and regular fee increases imposed by some credit rating agencies suggest there may be little effective competition for the provision of credit ratings in some specific market segments within the EU at present," ESMA said in a report.

"While it is encouraging to see that changes are taking place, we are realistic and know there is still work to be done which is why we have made recommendations relating to further supervisory powers regarding the appointment of independent non-executive directors and enhanced enforcement powers," ESMA said.

(Reporting by Huw Jones, editing by Carolyn Cohn)