European regulators are calling for more transparency in the fees that are being charged by credit rating agencies and trade repositories, according to a report published Thursday by the European Securities and Markets Authority (ESMA).

Firms providing those services need to ensure that the information they provide on fees in clear and sufficient, says the report, which follows the conclusion of an ESMA review of the existing fee structures in the credit rating and trade repository industries.

Specifically, rating agency clients “should be able to understand the key elements of the fee schedule, reasons for deviations from it, in addition to the reasons of price increases/decreases.” the report says. As well, trade repositories could improve transparency by reducing the complexity and increasing the comparability of their fee schedules.

Additionally, the report highlights regulators’ issues with how fees are set, along with conflicts and fairness issues that may arise at firms that are part of larger organizations.

According to the report, rating agencies and trade repositories must: ensure costs are a key factor in setting their prices; adopt controls to prove that regulatory objectives are being met regarding pricing; ensure that the provision of rating related services by affiliates of CRAs does not create conflicts; and ensure costs are fairly allocated by trade repositories that are part of larger organizations.

“ESMA has found that there are areas for significant improvement by both CRAs and TRs in their current fee practices, particularly in the areas of transparency and disclosure,” says Steven Maijoor, ESMA chairman, in a statement.

In the future, ESMA will focus on issues of transparency and disclosure, the fee-setting process, and interaction with affiliates, Maijoor notes. “The ultimate aim is to ensure that customers know exactly what they are paying for and how the fees they are charged are set,” he says.

ESMA may also decide to issue further guidance to ensure compliance with the requirements, in this area.