Ratings agencies will only be allowed to issue sovereign debt rating on three dates per year under new EU rules.
Cross-ownership of agencies and entities that they rate will also be limited to prevent conflicts of interest, while agency mergers are set to be restricted to boost competition.
Commissioner Michel Barnier says new legislation will reduce “over-reliance on ratings” .
He says: “Credit rating agencies will have to be more transparent when rating sovereign states, respect timing rules on sovereign ratings and justify the timing of publication of unsolicited ratings of sovereign debt.
“They will have to follow stricter rules which will make them more accountable for mistakes in case of negligence or intent.
“This matters because ratings have a direct impact on the financial markets and the wider economy and thus on the prosperity of European citizens.”
Italian MEP Leonardo Domenici says: “It was a very difficult process, but we have taken the existing legislation a step forward on a path which will have to be explored further.”
Barnier adds: “With this agreement, we are taking another important step towards financial stability.
“And we are substantially reducing the risk of a future financial crisis, with all its consequences for the real economy, growth, jobs and public budgets.”