Training on sovereign risk credit analysis, October 24

2018 Transparency Report of ACRA (JSC)

“We are committed to providing the Russian rating services market with high-quality products by building up a highly professional, technologically advanced and transparent business, consistently vested with confidence by the investment community.”

The Analytical Credit Rating Agency team

The Transparency Report contains information on operations of Analytical Credit Rating Agency over the period from January 1, 2018 to December 31, 2018.

The Transparency Report has been prepared in accordance with requirements of Part 4, Article 13 of Federal Law No 222-FZ. This document is subject to publication in the Compliance section of ACRA’s website.

CEO Address

Dear partners, customers, shareholders and other market participants!

We are pleased to present you with the third Transparency Report of the Analytical Credit Rating Agency (ACRA).

In 2018, ACRA celebrated its third anniversary and strengthened its leading positions in the financial market. In late 2018, the share of ACRA-rated entities operating in the Russian bond market was 86% for banks, 60% for other financial institutions, and 72% for administrative regions. Last year, ACRA assigned its first structured finance ratings to mortgage securitization transactions, SME lending transactions, and hybrid assets, which is a milestone for the Agency. In total, ACRA assigned over 70 new credit ratings last year.

In 2018, the Agency continued to develop its new business lines. First, ACRA Risk Management, a subsidiary of ACRA, was established to provide non-rating ancillary services, the range of which will be extended in the nearest future. Next, in mid-2018, ACRA finalized the acquisition of European Rating Agency (ERA), a Slovak rating agency. Since then, ERA has published a sovereign rating methodology and a supranational development institutions rating methodology, as well as assigned six ratings to European countries and one rating to a supranational development institution.

Our international affairs have had a further impulse from the fruitful collaboration with the Chinese rating agency Golden Credit Rating (GCR). In 2018, ACRA and GCR exchanged their expert delegations, completed a great job in preparing unique joint research on the bond markets in Russia and China, and participated in the major business and specialized conferences held in the both countries. In order to satisfy the demand from Chinese partners for quality expertise in the Russian market, ACRA has started to create a Chinese version of its corporate website, and the ACRA team has been strengthened by Chinese-speaking experts. In addition to its cooperation with Golden Credit, ACRA has also initiated a new working relationship with CARE Ratings, one of the three largest agencies in India with more than 25 years of experience. However, it is important to underline that along with the collaboration with foreign partners, ACRA has remained focused on the Russian market.

In 2018, ACRA analysts published multiple economic analysis essays and forecasts, spoke at key business events, commented on various economic developments, and met with domestic and foreign investors. I would like to underscore that in the situation of external instability and new challenges, the core asset of ACRA is its team of professionals. We will further optimize our internal environment and promote the career growth of our employees.

ACRA’s mission is to develop the best practices in the Russian financial market that contribute to its effectiveness and the quality of credit and investment decisions. ACRA builds its business on quality services for the widest possible range of Russian issuers and investors, based on profound professional expertise, high analytical standards, and strict compliance. Independence, conflict of interest prevention, integrity, and the quality and transparency of the rating process are the pivotal principles in the Code of Ethics and Professional Conduct that ACRA follows in its drive for stronger leading positions in the Russian rating services market and trusted relations with our customers and public. I hope that this report will be regarded as yet another confirmation of our adherence to the highest possible quality standards.

Igor Zelezetskii

1. About ACRA

1.1. Shareholder Structure

Analytical Credit Rating Agency (ACRA) was founded on November 20, 2015, with its 27 shareholders being Russian corporate and financial institutions each contributing a 3.7037% stake to its charter capital, which totals RUB 3,000,024 thousand.

ACRA shareholders are:

  • VTB Bank (PJSC)
  • “Bank “Saint-Petersburg” PJSC
  • Bank GPB (JSC)
  • Renova Group (JSC)
  • ONEXIM Group (LLC)
  • Kommersant (JSC)
  • Leader AM (CJSC)
  • PJSC “Moscow Exchange MICEX-RTS”
  • Credit Bank of Moscow (PJSC)
  • Blagosostoyanie NSPF
  • Otkritie Holding (JSC)
  • Promsvyazbank PJSC
  • Industrial Investors Group (LLC)
  • AO Raiffeisenbank
  • Rosgosstrakh Insurance Company (PJSC)
  • JSC Russian Agricultural Bank
  • PJSC Future FG
  • Sberbank of Russia (PJSC)
  • PAO Severstal
  • PJSC Sovcombank
  • TMK (PJSC)
  • AO UniCredit Bank

1.2. Governing Bodies and Management

ACRA’s governing bodies are the General Meeting of Shareholders, the Board of Directors and the CEO.

ACRA shareholders are listed in Par. 1.1 above.

The Board of Directors comprises five members, with four of them being independent directors. The fifth board member is the CEO of ACRA.

The Board of Directors includes:

  • Karl Johansson (USA), Chairman of the Board of Directors, independent director;
  • Thomas Missong (Austria), independent director;
  • Anouar Hassoune (Luxembourg), independent director;
  • Vincent Truglia (USA), independent director;
  • Ekaterina Trofimova (Russia), Member of the Board of Directors, Chief Executive Officer as of December 31, 2018.

General management of ACRA activities is carried out by the Board of Directors, with the exception of issues referred to the General Meeting of Shareholders by the Charter of ACRA and the Federal Law "On Joint-Stock Companies."

The day-to-day operations of ACRA are managed by the sole executive body of the Company, the Chief Executive Officer, who is accountable to the Board of Directors and the General Meeting of Shareholders.

1.3. Company Structure

Structurally, ACRA consists of the following business units:

  • Analytical Unit;
  • Methodology Group;
  • Compliance and Internal Control Service;
  • Operational Unit;
  • Business Development Directorate;
  • Analytical Services Group.

The Analytical Unit includes research groups focusing on specific types of rated objects:

  • Corporate Ratings Group;
  • Financial Institutions Ratings Group;
  • Sovereign and Regional Ratings Group;
  • Structured Finance  Ratings Group.

The Analytical Unit also includes the Research and Forecasting Group, which, among other things, is responsible for the preparation of macroeconomic and industry research materials.

2. Internal Control

Internal control at ACRA is carried out by the governing bodies, Compliance and Internal Control Service, rating committees, methodology committees, and ACRA employees within the scope of their competences and in line with ACRA’s internal documents.

The governing bodies and all ACRA employees are subject to Federal Law No 222-FZ1, other statutory acts of the Russian Federation, the Charter of ACRA, and ACRA’s internal documents.

ACRA’s internal control pursues the following objectives:

  • Ensuring credibility of assigned credit ratings and the independence of credit rating activities from any political and/or economic influence;
  • Identifying and preventing conflicts of interest, as well as managing them;
  • Ensuring the completeness, reliability and timeliness of compiling and providing reports to internal and external users;
  • Risk management in the course of ACRA’s activities, including regulatory risk;
  • Ensuring the effectiveness of ACRA’s activities.


1 Federal Law of 13 July 2015 No 222-FZ On the Activities of Credit Rating Agencies in the Russian Federation, On the Amendment to Article 76.1 of the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’ and the invalidation of certain provisions of legal acts of the Russian Federation

2.1. Code of Ethics and Professional Conduct, and documentation supporting ACRA’s activities

ACRA’s Board of Directors approved the Code of Ethics and Professional Conduct, which outlines the fundamental principles the Agency’s employees adhere to while performing rating activities and providing additional services.

The requirements of the Code of Ethics and Professional Conduct are taken into account in the course of preparing internal policies, regulations and procedures at ACRA.

All ACRA employees are required to familiarize themselves at the moment of hiring and on an annual basis with the Code of Ethics and Professional Conduct (, and applicable policies and regulations.

2.2. Board of Directors

In terms of internal control, the Board of Directors has been vested with the following powers:

  1. Evaluation of effectiveness of systems controlling credibility of assigned credit ratings;

  2. Evaluation of effectiveness of measures and procedures established to prevent, identify, manage, and disclose conflicts of interests;

  3. Control over compliance with  Federal Law No 222-FZ and the regulations of the Bank of Russia adopted in accordance with this Federal Law, and the documents of the credit rating agency, including the effectiveness of the methodology review function.

2.3. Compliance and Internal Control Service

The Compliance and Internal Control Service is an ACRA structural unit organizationally subordinate to the CEO and functionally subordinate and accountable for its activities to ACRA’s Board of Directors. The Service is headed by the Director for Compliance.

The Service is an internal control body in accordance with the requirements of  Federal Law No. 222-FZ.

ACRA’s CEO provides the conditions for unimpeded and efficient performance of the Compliance and Internal Control Service. The Service operates based on several principles, which include:

1. Independence and impartiality

  • ACRA makes sure that the Compliance and Internal Control Service is able to perform its functions without bias and without interference by ACRA employees who are not Service officers, governance bodies, as well as shareholders and persons who exercise control over or have a significant influence on ACRA;
  • The Compliance and Internal Control Service officers may not combine their activities with work in other ACRA units that may affect their independence, nor can such employees be employed in the governance bodies. The Service officers shall not be allowed any part-time employment in other organizations;
  • The Director for Compliance has the right to freely interact with the Board of Directors (or independent members of the Board, if necessary) and to report on his/her own initiative to the Board of Directors (or independent members of the Board, if necessary) about issues and problems arising in the course of Service functioning, coupled with proposals for their solution;
  • The Compliance and Internal Control Service regularly submits reports to the Board of Directors on the results of inspections, as well as on the identified risks and violations requiring appropriate measures;
  • The Compliance and Internal Control Service controls the effectiveness of measures taken by the business units and governance bodies of ACRA as a result of inspections and aimed at reducing identified risks;
  • The Compliance and Internal Control Service does not perform activities subject to inspections, except an independent inspection by an audit organization or an inspection by the Board of Directors;
  • ACRA ensures that the Compliance and Internal Control Service performs its duties without interference by the governance bodies, business units and employees of ACRA who are not Service officers, as well by shareholders and persons exercising control over or having significant influence on ACRA;
  • The remuneration of the Compliance and Internal Control Service officers shall not depend on ACRA’s financial results;
  • The Compliance and Internal Control Service develops internal documents, plans, methods and processes for carrying out verification activities independently and shall not coordinate them with inspected units.

2. Objectivity and ethical standards

  • The Compliance and Internal Control Service officers carry out their activities based on the Code of Ethics and Professional Conduct of ACRA and should avoid any influence that a potential conflict of interest may have on objectivity of their professional judgment in the course of internal control implementation.

3. Continuity of activities

  • The Compliance and Internal Control Service operates on a permanent basis and is part of ACRA’s organizational structure;
  • The Compliance and Internal Control Service has permanent personnel only and includes only full-time employees;
  • The number of officers working for the Compliance and Internal Control Service and the latter’s technological support and structure must be in line with the scale of ACRA’s business.

4. Professional competence

  • Upon the appointment and during the entire tenure the Director for Compliance must comply with business reputation requirements established by Part 1 of Article 7 of  Federal Law No. 222-FZ;
  • The professional competence of the Compliance and Internal Control Service personnel is maintained at a proper level through periodic training and professional development.

2.4. Rating Committee

The Rating Committee is a group of rating analysts, including the Chairman of the Rating Committee, who decides on rating actions.

A member of the rating Committee may be an employee ACRA’s analytical unit who meets the requirements for knowledge and professional experience, has passed the knowledge and competencies assessment in accordance with the requirements of ACRA’s internal documents.

The formation of the Rating Committee is made taking into account the requirements for the absence of actual or potential conflicts of interest among the members of the Rating Committee regarding rating object under consideration at the meeting of the Rating Committee. The Chairman of the Rating Committee and the Compliance and Internal Control Service are responsible for monitoring the absence of actual or potential conflicts of interest among the members of the Rating Committee.

2.5. Methodology Group and Methodology Committee

The Methodology Group is an ACRA permanent structural unit responsible for development, testing, validating and updating methodologies, as well as for supervision over the application of methodologies in the course of rating activities, and for assessing the accuracy of such implementation. The Methodology Group is organizationally subordinate to the CEO and functionally subordinate and accountable for its activities to the Board of Directors.

Approvals and revisions of methodologies are subject to decisions taken by the Methodology Committee, a permanent collegial body formed by members of the Methodology Group.

Validation and testing of methodologies are performed by a Methodology Group member, who is not part of the Methodology Committee and does not participate in the development of methodologies.

The Methodology Group reports on its activities to the Board of Directors.

3. Results of annual inspection of ACRA carried out by the internal control body

The rating activities performed by ACRA are in line with Russian legislation and ACRA’s own internal documents.

The rating process is subject to control procedures aimed at identifying conflicts of interest and independence of rating activities from political or economic influence, as required by Federal Law No. 222-FZ, the Bank of Russia regulations, and ACRA’s internal documents. The control procedures currently in place are assessed as adequate. No conflicts of interest have been discovered in the course of the rating process.

The inspection revealed certain deficiencies in terms of the composition and structure of control procedures aimed at ensuring proper implementation of the Agency's operational and analytical processes. A relevant plan aimed at eliminating those deficiencies has been approved by the Board of Directors and is being implemented.

4. Rating analysts allocation statistics

Table 1. Statistical information on the distribution of rating analysts by the classes of objects of credit rating, rating actions on assignment, and reviews of credit ratings performed in 2018

Class of objects of credit ratings 

Number of rating analysts involved in the rating assignment

Number of rating analysts involved in the rating reviews






Non-financial companies (including holding companies)




Leasing companies




Insurance companies




Other non-bank financial companies




Debt instruments2




Structured finance instruments3




Sovereign ratings




2 Debt instruments are issues of municipal bonds of the Subjects of the Russian Federation and municipal entities, as well as corporate bonds of non-financial companies, banks, non-bank financial organizations and other issuers, placed under public subscription, with the exception of structured finance instruments.
3 Structured finance instruments are debt instruments that typically have the following attributes:
Issuer meeting the requirements of limited risk of bankruptcy;
Granular portfolio as the main source of emission collateral;
Tranche (the order of execution of obligations on bonds of different issues and/or monetary obligations under contracts that are secured by the same collateral portfolio);
No full credit substitution (guarantees, sureties from third parties).

5. Rating analyst rotation

5.1. Requirements to rotate lead rating analysts

ACRA ensures a procedure of rotation (replacement of lead rating analysts who participate in preparation of a credit rating or credit rating outlook with regard to one rated entity).

Lead rating analysts are not allowed to participate in rating actions pertaining to a given rated entity for more than four consecutive years and for more than five consecutive years in relation to sovereign credit ratings.

Lead rating analysts who have terminated their participation in rating actions related to one rated entity due to rotation are not allowed to participate in rating actions related to this rated entity for two years following the rotation.

5.2. Data on rotation of lead rating analysts in 2018

There was no mandatory rotation of lead rating analysts in 2018, as mandatory rotation time has not yet come.

6. Documentation storage policy

ACRA stores internal data and documents used in the course of credit rating assignment as long as required by the Bank of Russia, but not less than 5 years, ensuring integrity, accuracy, and reliability of these documents in order to provide for verifiability of rating actions accuracy. All internal data and documents are kept on file to ensure objectivity of ACRA’s rating activities, as well as to back up the processes of internal audit, compliance control, and quality control.

ACRA ensures storage of information within the timeframes defined by the Bank of Russia’s requirements, including the following information and data:

  • Information on composition of rating committees, sets of documents and data related to the resolution on implementation of a rating action, as well as rating committees’ meeting minutes;
  • All initial information upon which lay the basis for rating analysis, including documents and information provided by rated entities, emails, rating meeting minutes, and other information;
  • All versions of methodologies, models, validation reports;
  • Data related to interaction with clients in the framework of concluding agreements, as well as agreements on rating actions, and agreements on additional services;
  • Communications with regulatory bodies;
  • Documentation of governing bodies;
  • ACRA’s internal documents.

Information and data related to analytical activities, development, and methodology validation are stored on dedicated IT resources, separate from other IT resources containing information on contracts and remuneration for assigned ratings.

Access to ACRA’s IT resources is provided in compliance with “Chinese wall” and “need-to-know” principles.4

ACRA has appointed an information security manager responsible for the implementation of information security measures, compliance with ACRA’s information confidentiality regime, the requirements of the legislation of the Russian Federation, as well as the requirements of the Bank of Russia for the safety and protection of information obtained in the course of ACRA activities.

7. Information on revenues

Table 2. Information on revenues for the period from January 1 to December 31, 2018

ACRA revenues from rating activities, RUB th (excluding VAT)


ACRA revenues from additional 5 services, RUB th (excluding VAT)


ACRA 2018 revenues (total), RUB th (excluding VAT)


8. Mandatory training of rating analysts

To ensure the necessary competence level, rating analysts completed the required number of mandatory training hours in 2018, as outlined in ACRA’s internal documents.


These principles can be found in the Policy on handling Confidential Information:
The List of Additional Services is available at

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