Credit rating agencies could be forced to change their governance structures and bolster safeguards to their independence when European regulators bring in legislation to supervise their activities this month.

Rules requiring agencies that operate in Europe to register and meet strict regulatory requirements are due to be put forward by Brussels on November 12. The move – first announced in outline by EU internal market commissioner Charlie McCreevy in June – comes after criticism of their role in the markets for complex structured debt that have been at the heart of the credit crisis.

Agencies have been criticised for their judgment and standards, which led them to underestimate the risks attached to huge volumes of mortgage-related bonds and collateralised debt obligations that have ended up creating huge losses for the global banking and investment industry.

The European Commission will insist that there should be at least three independent, non-executive directors on each agency’s administrative or supervisory board and require the majority of directors to have expertise in financial services, according to a draft of the proposed legislation, seen by the Financial Times.

The remuneration of the independent board members, meanwhile, must not be linked to the business performance of the agency.

Organisations or entities that are rated by an agency on a long-running basis will also have to be covered by a rotating pool of analysts to avoid “long-lasting relationships”, which could compromise independence. This step has already been taken by at least some of the larger agencies. The Commission is also proposing that registration of agencies should be handled through the Committee of European Securities Regulators, a European co-ordinating and advisory body.

Supervision would then be handled by the authorities in the country where the agency is registered, which for the industry leaders would almost certainly mean London, putting the onus on the UK’s Financial Services Authority.

The UK Treasury declined to comment on Friday on a document not officially published. However, the task of supervising three main companies – Moody’s, Standard & Poor’s and Fitch – is not likely to be seen as too onerous for the regulator.

However, other member states would be able to step in if the home state regulator failed to take necessary action.

Additional reporting Paul J Davies