Regulation

Preamble

ECRAI™ - External Credit Rating and Assessment Institution is not providing Unsolicited Credit Ratings. This product is considered by ECRAI™ as not following the best interests of the market.  ECRAI™ is not active in the field of Structured Finance Products Credit Ratings.

1. QUALITY AND INTEGRITY OF THE RATING PROCESS

A. Quality of the Rating Process

1.1 ECRAI™ adopts, implements and enforces written procedures to ensure that the opinions it disseminates are based on a thorough analysis of all information known to ECRAI™ according to ECRAI™'s published rating methodology.

1.2 ECRAI™ uses rating methodologies that are rigorous, systematic, and, where possible, result in ratings that can be subjected to some form of objective validation based on historical experience.

1.3 In assessing an issuer's creditworthiness, ECRAI™ analysts involved in the preparation or review of any rating action use methodologies established by ECRAI™. ECRAI™ analysts apply a given methodology in a consistent manner, as determined by ECRAI™.

1.4 Credit ratings are assigned by ECRAI™ and not by any individual analyst employed by ECRAI™; ratings reflect all information known, and believed to be relevant, to ECRAI™, consistent with ECRAI™'s published methodology; and ECRAI™ uses people who, individually or collectively have appropriate knowledge and experience in developing a rating opinion for the type of credit being applied.

1.5 ECRAI™ maintains internal records to support its credit opinions for a reasonable period of time or in accordance with applicable law.

1.6 ECRAI™ and its analysts take steps to avoid issuing any credit analyses or reports that contain misrepresentations or are otherwise misleading as to the general creditworthiness of an issuer or obligation.

1.7 ECRAI™ ensures that it has and devotes sufficient resources to carry out high-quality credit assessments of all obligations and issuers they rate. When deciding whether to rate or continue rating an obligation or issuer, ECRAI™ assesses whether it is able to devote sufficient personnel with sufficient skill sets to make a proper rating assessment, and whether its personnel likely have access to sufficient information needed in order to make such an assessment. ECRAI™ adopts reasonable measures so that the information it uses in assigning a rating is of sufficient quality to support a credible rating. ECRAI™ established and implemented a rigorous and formal internal review function responsible for periodically reviewing the methodologies and models and significant changes to the methodologies and models it uses.  Where feasible and appropriate for the size and scope of its credit rating services, this function is independent of the business lines that are principally responsible for rating various classes of issuers and obligations.

1.8 ECRAI™ structures its rating team to promote continuity and avoid bias in the rating process.

B. Monitoring and Updating

1.9 ECRAI™ ensures that adequate personell and financial recources are allocated to monitoring and updating its ratings. Except for ratings that clearly indicate they do not entail ongoing surveillance, once a rating is published ECRAI™ monitors on an ongoing basis and update the rating by:

a)    regularly reviewing the issuer's creditworthiness;

b)    initiating a review of the status of the rating upon becoming aware of any information that might reasonably be expected to result in a rating action (including termination of a rating), consistent with the applicable rating methodology; and,

c)     updating on a timely basis the rating, as appropriate, based on the results of such review.

Subsequent monitoring incorporates all cumulative experience obtained.  Changes in ratings criteria and assumptions are applied where appropriate to both initial ratings and subsequent ratings.

1.10 Where ECRAI™ makes its ratings available to the public, ECRAI™ publicly announces if it discontinues rating an issuer or obligation. Where ECRAI™'s ratings are provided only to its subscribers, ECRAI™ announces to its subscribers if it discontinues rating an issuer or obligation. In both cases, continuing publications by ECRAI™ of the discontinued rating indicates the date the rating was last updated and the fact that the rating is no longer being updated.

C. Integrity of the Rating Process

1.11 ECRAI™ and all its employees comply with all applicable laws and regulations governing their activities in each jurisdiction in which it operates.

1.12 ECRAI™ and its employees deal fairly and honestly with issuers, investors, other market participants, and the public.

1.13 ECRAI™ analysts are held to high standards of integrity, and ECRAI™ does not employ individuals with demonstrably compromised integrity.

1.14 ECRAI™ and its employees do not, either implicitly or explicitly, give any assurance or guarantee of a particular rating prior to a rating assessment. This does not preclude ECRAI™ from developing prospective assessments used in structured finance and similar transactions.

1.15 ECRAI™ institutes policies and procedures that clearly specify a person responsible for the ECRAI™'s and ECRAI™ employees' compliance with the provisions of ECRAI™'s Code of conduct and with applicable laws and regulations. This person's reporting lines and compensation are independent of ECRAI™'s rating operations.

1.16 Upon becoming aware that another employee or entity under common control with ECRAI™ is or has engaged in conduct that is illegal, unethical or contrary to ECRAI™'s Code of conduct, ECRAI™ employee reports such information immediately to the individual in charge of compliance or an officer of ECRAI™, as appropriate, so proper action may be taken. ECRAI™' employees are not necessarily expected to be experts in the law. Nonetheless, its employees are expected to report the activities that a reasonable person would question. Any ECRAI™ officer who receives such a report from ECRAI™'s employee is obligated to take appropriate action, as determined by the laws and regulations of the jurisdiction and the rules and guidelines set forth by ECRAI™. ECRAI™'s management prohibits retaliation by other of its staff or by ECRAI™ itself against any employees who, in good faith, make such reports.

2. ECRAI™ INDEPENDENCE AND AVOIDANCE OF CONFLICTS OF INTEREST

A. General

2.1 ECRAI™ does not forbear or refrain from taking a rating action based on the potential effect (economic, political, or otherwise) of the action on ECRAI™, an issuer, an investor, or other market participant.

2.2 ECRAI™ and its analysts use care and professional judgment to maintain both the substance and appearance of independence and objectivity.

2.3 The determination of a credit rating is influenced only by factors relevant to the credit assessment.

2.4 The credit rating ECRAI™ assigns to an issuer or security is not affected by the existence of or potential for a business relationship between ECRAI™ and the issuer (or its affiliates) or any other party, or the non-existence of such a relationship.

2.5 ECRAI™ separates, operationally and legally, its credit rating business and ECRAI™ analysts from any other businesses of ECRAI™, including consulting businesses that may present a conflict of interest. ECRAI™ ensures that ancillary business operations which do not necessarily present conflicts of interest with ECRAI™'s rating business have in place procedures and mechanisms designed to minimize the likelihood that conflicts of interest arise. ECRAI™ also defines what considers, and does not consider, to be an ancillary business and why.

B. ECRAI™ Procedures and Policies

2.6 ECRAI™ adopts written internal procedures and mechanisms to (1) identify, and (2) eliminate, or manage and disclose, as appropriate, any actual or potential conflicts of interest that may influence the opinions and analyses ECRAI™ makes or the judgment and analyses of the individuals ECRAI™ employs who have an influence on ratings decisions. ECRAI™ discloses such conflict avoidance and management measures.

2.7 ECRAI™'s disclosures of actual and potential conflicts of interest are complete, timely, clear, concise, specific and prominent.

2.8 ECRAI™ discloses the general nature of its compensation arrangements with rated entities.

2.8 (a) Where ECRAI™ receives from a rated entity compensation unrelated to its ratings service, such as compensation for consulting services, ECRAI™ discloses the proportion such non-rating fees constitute against the fees ECRAI™ receives from the entity for ratings services.

2.8 (b)  ECRAI™ discloses if it receives 10 percent or more of its annual revenue from a single issuer, originator, client or subscriber (including any affiliates of that issuer, originator, client or subscriber).

2.9 ECRAI™ and its employees do not engage in any securities or derivatives trading presenting conflicts of interest with ECRAI™'s rating activities.

2.10 In instances where rated entities (e.g., governments) have, or are simultaneously pursuing, oversight functions related to ECRAI™, ECRAI™ uses different employees to conduct its rating actions than those employees involved in its oversight issues.

C. ECRAI™ Analyst and Employee Independence

2.11 Reporting lines for ECRAI™ employees and their compensation arrangements is structured to eliminate or effectively manage actual and potential conflicts of interest.

2.11 (a) ECRAI™ analyst is not compensated or evaluated on the basis of the amount of revenue that ECRAI™ derives from issuers that the analyst rates or with which the analyst regularly interacts.

2.11 (b) ECRAI™ conducts formal and periodic reviews of compensation policies and practices for its analysts and other employees who participate in or who might otherwise have an effect on the rating process to ensure that these policies and practices do not compromise the objectivity of the ECRAI™’s rating process.

2.12 ECRAI™ does not have employees who are directly involved in the rating process initiate, or participate in, discussions regarding fees or payments with any entity they rate.

2.13 No ECRAI™ employee participates in or otherwise influences the determination of ECRAI™'s rating of any particular entity or obligation if the employee:

a)    Owns securities or derivatives of the rated entity, other than holdings in diversified collective investment schemes;

b)    Owns securities or derivatives of any entity related to a rated entity, the ownership of which may cause or may be perceived as causing a conflict of interest, other than holdings in diversified collective investment schemes;

c)     Has had a recent employment or other significant business relationship with the rated entity that may cause or may be perceived as causing a conflict of interest;

d)    Has an immediate relation (i.e., a spouse, partner, parent, child, or sibling) who currently works for the rated entity; or

e)    Has, or had, any other relationship with the rated entity or any related entity thereof that may cause or may be perceived as causing a conflict of interest.

2.14 ECRAI™'s analysts and anyone involved in the rating process (or their spouse, partner or minor children) does not buy or sell or engage in any transaction in any security or derivative based on a security issued, guaranteed, or otherwise supported by any entity within such analyst's area of primary analytical responsibility, other than holdings in diversified collective investment schemes.

2.15 ECRAI™ employees are prohibited from soliciting money, gifts or favors from anyone with whom ECRAI™ does business and is prohibited from accepting gifts offered in the form of cash or any gifts exceeding a minimal monetary value.

2.16 Any ECRAI™ analyst who becomes involved in any personal relationship that creates the potential for any real or apparent conflict of interest (including, for example, any personal relationship with an employee of a rated entity or agent of such entity within his or her area of analytic responsibility), is required to disclose such relationship to the appropriate manager or officer of ECRAI™, as determined by the ECRAI™'s compliance policies.

2.17  ECRAI™ established policies and procedures for reviewing the past work of analysts that leave the employ of ECRAI™ and join an issuer the ECRAI™ analyst has been involved in rating, or a financial firm with which the ECRAI™ analyst has had significant dealings as part of his or her duties at ECRAI™.

3. ECRAI™ RESPONSIBILITIES TO THE INVESTING PUBLIC AND ISSUERS

A. Transparency and Timeliness of Ratings Disclosure

3.1 ECRAI™ distributes in a timely manner its ratings decisions regarding the entities and securities it rates.

3.2 ECRAI™ publicly discloses its policies for distributing ratings, reports and updates.

3.3 ECRAI™ indicates with each of its ratings when the rating was last updated.  ECRAI™ indicates with each of its ratings when the rating was last updated. Each rating announcement should also indicate the principal methodology or methodology version that was used in determining the rating and where a description of that methodology can be found. Where the rating is based on more than one methodology, or where a review of only the principal methodology might cause investors to overlook other important aspects of the rating, ECRAI™ explains this fact in the ratings announcement, and indicate where a discussion of how the different methodologies and other important aspects factored into the rating decision.

3.4 Except for "private ratings" provided only to the issuer, ECRAI™ discloses to the public, on a non-selective basis and free of charge, any rating regarding publicly issued securities, or public issuers themselves, as well as any subsequent decisions to discontinue such a rating, if the rating action is based in whole or in part on material non-public information.

3.5 ECRAI™ publishes sufficient information about its procedures, methodologies and assumptions (including financial statement adjustments that deviate materially from those contained in the issuer's published financial statements) so that outside parties can understand how a rating was arrived at by ECRAI™. This information includes (but is limited to) the meaning of each rating category and the definition of default or recovery, and the time horizon ECRAI™ used when making a rating decision. ECRAI™ assists investors in developing a greater understanding of what a credit rating is, and the limits to which credit ratings can be put to use vis-à-vis a particular type of financial product that ECRAI™ rates. ECRAI™ clearly indicates the attributes and limitations of each credit opinion, and the limits to which ECRAI™ verifies information provided to it by the issuer or originator of a rated security.

3.6 When issuing or revising a rating, ECRAI™ explains in its press releases and reports the key elements underlying the rating opinion.

3.7 Where feasible and appropriate, prior to issuing or revising a rating, ECRAI™ informs the issuer of the critical information and principal considerations upon which a rating is based and afford the issuer an opportunity to clarify any likely factual misperceptions or other matters that ECRAI™ might wish to be made aware of in order to produce an accurate rating. ECRAI™ duly evaluates the response. Where in particular a circumstance ECRAI™ has not informed the issuer prior to issuing or revising a rating, ECRAI™ informs the issuer as soon as practical thereafter and, generally, explains the reason for the delay.

3.8 In order to promote transparency and to enable the market to best judge the performance of the ratings, ECRAI™, where possible, publishes sufficient information about the historical default rates of ECRAI™ rating categories and whether the default rates of these categories have changed over time, so that interested parties can understand the historical performance of each category and if and how rating categories have changed, and be able to draw quality comparisons among ratings given by different credit rating agencies. If the nature of the rating or other circumstances make a historical default rate inappropriate, statistically invalid, or otherwise likely to mislead the users of the rating, ECRAI™ explains this. This information  includes verifiable, quantifiable historical information about the weighted and unweighted performance of its rating opinions, organized and structured, and, where possible, standardized in such a way to assist investors in drawing performance comparisons between different CRAs.

3.9 For each rating, ECRAI™ discloses whether the issuer participated in the rating process. Each rating not initiated at the request of the issuer is identified as such. ECRAI™ also discloses their policies and procedures regarding unsolicited ratings.

3.10 Because users of credit ratings rely on an existing awareness of ECRAI™ methodologies, practices, procedures and processes, ECRAI™ fully and publicly discloses any material modification to its methodologies and significant practices, procedures, and processes. Where feasible and appropriate, disclosure of such material modifications is made prior to their going into effect. ECRAI™ carefully considers the various uses of credit ratings before modifying its methodologies, practices, procedures and processes.

B. The Treatment of Confidential Information

3.11 ECRAI™ adopts procedures and mechanisms to protect the confidential nature of information shared with it by issuers under the terms of a confidentiality agreement or otherwise under a mutual understanding that the information is shared confidentially. Unless otherwise permitted by the confidentiality agreement and consistent with applicable laws or regulations, ECRAI™ and their employees do not disclose confidential information in press releases, through research conferences, to future employers, or in conversations with investors, other issuers, other persons, or otherwise.

3.12 ECRAI™ uses confidential information only for purposes related to its rating activities or otherwise in accordance with any confidentiality agreements with the issuer.

3.13 ECRAI™ employees take all reasonable measures to protect all property and records belonging to or in possession of ECRAI™ from fraud, theft or misuse.

3.14 ECRAI™ employees are prohibited from engaging in transactions in securities when they possess confidential information concerning the issuer of such security.

3.15 In preservation of confidential information, ECRAI™ employees familiarize themselves with the internal securities trading policies maintained by their employer, and periodically certify their compliance as required by such policies.

3.16 ECRAI™ employees do not selectively disclose any non-public information about rating opinions or possible future rating actions of ECRAI™, except to the issuer or its designated agents.

3.17 ECRAI™ employees do not share confidential information entrusted to ECRAI™ with employees of any affiliated entities that are not credit rating agencies. ECRAI™ employees do not share confidential information within ECRAI™ except on an "as needed" basis.

3.18 ECRAI™ employees do not use or share confidential information for the purpose of trading securities, or for any other purpose except the conduct of the ECRAI™'s business.

4. DISCLOSURE OF THE CODE OF CONDUCT AND COMMUNICATION WITH MARKET PARTICIPANTS

4.1 ECRAI™ discloses to the public the ECRAI™ Code of Conduct and describes how the provisions of the Code of conduct fully implement the provisions of the IOSCO Principles Regarding the Activities of Credit Rating Agencies and the IOSCO Code of Conduct Fundamentals for Credit Rating Agencies. If ECRAI™ Code of Conduct deviates from the IOSCO provisions, ECRAI™ explains where and why these deviations exist, and how any deviations nonetheless achieve the objectives contained in the IOSCO provisions. ECRAI™ also describes generally how it intends to enforce the ECRAI™ Code of Conduct and discloses on a timely basis any changes to the Code of conduct or how it is implemented and enforced.

4.2 ECRAI™ establishes a function within its organization charged with communicating with market participants and the public about any questions, concerns or complaints that ECRAI™ may receive. The objective of this function is to help ensure that ECRAI™'s officers and management are informed of those issues that ECRAI™'s officers and management might want to be made aware of when setting the organization's policies.

4.3 ECRAI™  publishes in a prominent position on its home webpage links to (1) the ECRAI™’s Code of Conduct; (2) a description of the methodologies it uses; and (3) information about the ECRAI™’s historic performance data.