After Moody's and Standard & Poor's downgraded the Russian sovereign rating in the last year, the central bank has given global ratings agencies two years to register subsidiaries in Russia.
Those subsidiaries would not be permitted to withdraw ratings on the basis of sanctions. They can only do so if the company in question does not provide information essential for ratings process or cancels the contract with the agency.
But so as not to leave anything to chance, a domestic ratings agency offers a potential substitute if the big international ratings agencies choose to withdraw from rating the country and its issuers.
Acra's plan so far looks like a firm commitment to international credibility — several of the big capital markets names involved in the new agency have CVs including years at the big three international ratings houses.
Ekaterina Trofimova, for example, who has been appointed chief executive officer, is a member of the board at Gazprombank but also worked at a financial analyst, director and head of Russia and CIS financial institutions rating group at Standard & Poor’s between 2000 and 2011.
Russian issuers are also likely to want to get on board, with the stability of a rating from a company rooted in Russia keeping the door propped open to domestic issuance. Several have also found the international ratings agencies' weightings irritating in the past and have advocated the establishment of something similar.
But the venture will have to stand up to criticism because it will have been set up by some of the Russian banks and corporates that will need to be rated by this service.
Acra will finance its operations from Rb3bn ($48m) of capital, which will be formed by stakes of up to 4% for each shareholder, including state banks such as Sberbank, VTB, and the Moscow Exchange.
It’s a glaring conflict of interest and any evidence of that conflict or other relationships reflected in ratings will undermine the whole process.
Ideally, the new ratings agency would have been financed by an independent third party, though admittedly, one could argue that in Russia, they too may end up under pressure to deliver certain ratings for certain companies — triple-As to all of the Putin portfolio.
Acra could find itself filling an important role in the Russian bond markets. But to do so and be taken seriously by investors, it will need time and a track record of being squeaky clean.