By Simon Miller

European business will not have to rotate their credit-rating company every three years following a vote by European Union parliamentarians.

The European Parliament's economic and monetary affairs committee voted to scale back proposals that would have forced businesses to rotate the credit rating agency they hire to assess debt.

Instead, rotation would only apply to securitisations and other kinds of structured finance.

The vote brings the parliament largely into line with EU member states which will also approve the new rules which were proposed by the European Commission last year.

The rotation rule was part of draft rule to toughen regulation of the ratings industry which some in the EU believe exacerbated the eurocrisis with some of their pronouncements.

The commission said rotation would boost competition and solve potential conflicts of interest.

The committee deiced that rotation for rating structured finance products would be required every five years with a partial exemption for companies using more than two rating companies.

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