MOODYS CORP /DE/ (MCO) Risk Factors

Recent key developments

Concrete developments — dated events, named agreements and instruments, legal proceedings — that MOODYS CORP /DE/ surfaced in its latest filing.

• MIS is subject to formal regulation and periodic inspections in the EU, U.K., Australia, Singapore, Japan, and Hong Kong
• EU and U.K. rules include procedural requirements for sovereign credit ratings, liability for intentional or grossly negligent failure to abide by regulations, mandatory analyst rotation, and restrictions on CRAs or shareholders if certain ownership thresholds are crossed
• EU and U.K. rules include conditions for issuing credit ratings, rules on CRA organization, conflict-of-interest restrictions, requirements that fees be based on costs and non-discriminatory, and special requirements for structured finance instrument ratings
• Certain MIS products may fall under the EU Regulation on ESG Rating Activities, imposing new substantive and procedural requirements
• EU CRAs are subject to DORA, imposing requirements on ICT risk management, regulatory reporting, testing, and third-party ICT service provider risks
• In Hong Kong, rules include liability for intentional or negligent dissemination of false and misleading information and procedural requirements for notifying regulators
• MIS Hong Kong is subject to a code of conduct with procedural and substantive requirements for credit ratings, conflict-of-interest restrictions including disclosure of compensation arrangements with rated entities, and special requirements for structured finance ratings
• The Company holds a 30% investment in CCXI, a domestic CRA licensed in China
• In Australia, CRAs must hold an Australian financial services license (AFSL) if providing credit ratings in Australia, and MIS Australia holds an AFSL authorizing it to provide general advice to wholesale clients only
• MIS Australia must comply with AFSL obligations including providing services efficiently, honestly, and fairly, managing conflicts of interest, and complying with AFSL conditions including specific credit rating conditions
• U.S. banking regulators issued guidance on third-party relationships requiring banks to exercise comprehensive oversight and adopt risk management processes commensurate with risk, with more rigorous oversight for critical activities
• Regulators in Europe and other foreign markets issued similar third-party risk management guidance; DORA requires EU financial institutions to have comprehensive governance for ICT risks including third-party providers like MA
• In China, MA is licensed to provide subscriptions to credit research, ratings data, and financial market information, and broadly crafted laws subject to broad discretion of Chinese regulators could affect the Company's ability to conduct business in China
• Moody’s faced numerous class action lawsuits and other litigation related to the U.S. subprime residential mortgage sector and the 2007-2008 financial crisis2007-2008
• The OBBBA signed into law on July 4, 2025, including permanent extension of certain expiring provisions of the Tax Act of 2017, modifications to the international tax framework, and restoration of favorable tax treatment for certain business provisions, with additional regulatory guidance potentially affecting effective tax ratesJuly 4, 2025
• Multiple foreign jurisdictions enacted legislation adopting the OECD GloBE (Pillar II) minimum tax rules with an effective date beginning in 2024, though currently not anticipated to have a material impact2024
• EU's implementation of DORA in January 2025January 2025
• EU AI Act and other AI legislation
• The EU regulation on the transparency and integrity of ESG rating activities adopted by the European Parliament and Council in November 2024 and published in the Official Journal of the EU in December 2024November 2024
• Draft legislation published by the United Kingdom in 2024 to empower the FCA to supervise ESG rating providers2024
• At December 31, 2025, Moody’s had $6,368 million of goodwill and $1,866 million of intangible assets on its balance sheetDecember 31, 2025