BEIJING - The establishment of a super-sovereign credit rating agency, to reduce dependence on the "big three", is taking shape, industry insiders said.

The new agency will be established by organizations in Europe, the United States and countries that make up the BRICS (Brazil, Russia, India, China and South Africa).

Its headquarters will probably be based in Europe when details are finalized in Frankfurt later this year, according to an industry insider.

"We hope that the agency will gain a leading position in the global rating market within the next five years," said Guan Jianzhong, CEO of Dagong Global Credit Ratings.

Dagong will play a key role in the agency, Guan said.

"We're fully aware that a globally recognized organization can never be propped up by one agency, so we will bring in more countries," Guan told China Daily.

Initial plans envisage eight agencies taking part though that has yet to be confirmed, according to Dagong.

Contacts have been made with representatives from the BRICS, as well as agencies including National Information & Credit Evaluation in South Korea, the Scope Group from Germany, and RusRating from Russia, all of which have visited Dagong.

Former Italian prime minister Romano Prodi, and other leading political figures, have helped formulate plans to establish the agency, Dagong said.

The agency will be funded by participating organizations.

There are currently 152 rating agencies worldwide and the market experienced a 20 percent annual growth since 2000.

Moody's, Standard & Poor's and Fitch together account for 95 percent of the market, worth $4.45 billion.

But the market's momentum was halted by the financial crisis in 2008 and the failure of some agencies to predict the downturn.

Over the past three years doubts have emerged about the credibility of the "big three" amid growing demands for an overhaul of the global rating system.

Capital, a French monthly economics magazine, reported in July that a European credit rating agency would be established, costing about 300 million euros ($424 million), citing Markus Krall, a partner at international consultants, Roland Berger.

Dagong has been actively issuing sovereign credit ratings since 2010. It downgraded the credit rating for the US one week before Standard & Poor's grabbed international headlines by issuing a similar warning in early August.

Fan Mingtai, a senior researcher with the Institute of Quantitative & Technical Economics at the Chinese Academy of Social Sciences, said that the current dominance of the US-led rating system will be hard to challenge.

"Sovereign credit rating is determined by the global status of a country and its currency. To that end the US and US dollars are still the No 1 choice for investors," Fan said.

The influence of a rating agency led by China and other emerging economies will grow with the increase of their economic and political power, and this will still take some time, Fan said.

A small number of firms will continue to hold sway, said Mei Xinyu, a researcher with the Chinese Academy of International Trade and Economic Cooperation, affiliated to the Ministry of Commerce.

"A market of unbridled competition could result in even more problems, making the relatively weaker players bow to pressure from clients and surrender their independence," Mei said. "So it will be the 'big three', with possibly some new agencies, that will dominate the market."

Ahmed Sule, a strategist for Diadem Capital in London, said a major challenge for a new agency is the probability that its ratings will be disregarded, at least initially. On top of this, any new agency will not have easy access to debt issuers in developed markets.

"The agency would have to be independent and autonomous; this could be a challenge but the agency would have to work toward this independence if it is to be accepted by the international capital market," Sule wrote in a commentary.

Brian Lawson, global economist at Exclusive Analysis in London, also warned that integrity was a key factor.

"Ultimately any agency should be driven by its own rating policies, though these may be subject to political influence."

A European agency would lack credibility if it were seen as pro-Europe, and investors would probably continue to use US agencies, Lawson said.

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