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1. Record keeping information ESG rating providers shall keep records of all of the following:

(a) for each ESG rating, where applicable:

(i) the identity of the rating analysts participating in the determination of the ESG rating, the identity of the persons who have approved the ESG rating, information as to whether the ESG rating was solicited or unsolicited, and the date on which the ESG rating action was taken;

(ii) the identity of the persons responsible for the development of the rule-based methodology, and the identity of the persons who have approved the rating methodology;

(b) the account records relating to fees received from any rated item or issuer of the rated item or related third party or any user of ESG ratings;

(c) the account records for each user of ESG ratings;

(d) the records documenting the established procedures and rating methodologies used by the ESG rating provider to determine ESG ratings;

(e) the internal records and external communications and files, including non-public information and work papers, used to form the basis of any ESG rating decision taken;

(f) records of the procedures and measures implemented by the ESG rating provider to comply with this Regulation;

(g) the methodology used for the determination of an ESG rating;

(h) changes in, or deviations from, standard procedures and methodologies;

(i) all documents relating to any complaint, including those submitted by a complainant.

2. Outsourcing Where ESG rating providers outsource to a service provider functions or any relevant services or activities in the provision of an ESG rating, the ESG rating provider shall ensure that the following conditions are met:

(a) the service provider has the ability, capacity, and any authorisation required by law, to perform the outsourced functions, services or activities reliably and professionally;

(b) the ESG rating provider takes appropriate action if it appears that the service provider might not be carrying out the outsourced functions effectively and in compliance with applicable law and regulatory requirements;

(c) the ESG rating provider retains the necessary expertise to supervise the outsourced functions effectively and to manage the risks associated with the outsourcing;

(d) the service provider discloses to the ESG rating provider any development that might have a material impact on its ability to carry out the outsourced functions effectively and in compliance with applicable law and regulatory requirements;

(e) the ESG rating provider is able to terminate the outsourcing arrangements where necessary;

(f) the ESG rating provider takes reasonable steps, including contingency plans, to avoid undue operational risk related to the participation of the service provider in the ESG rating determination process.