The Securities and Exchange Board of India (SEBI) has announced significant updates aimed at improving the ease of doing business for Credit Rating Agencies (CRAs).
The circular modifies Chapter III of the Master Circular for Credit Rating Agencies, initially issued on May 16, 2024.
The primary objective is to streamline the process of periodic surveillance of ratings and bring uniformity in handling appeals made by issuers regarding rating actions.
The following guidelines are issued by SEBI in this regard: –
CRAs are now required to communicate the rating to the issuer within one working day of the Rating Committee meeting. Although an outer limit of one working day is set, CRAs are encouraged to inform the issuer on the same day as the meeting.
Issuers have up to three working days from the Rating Committee meeting to request a review or appeal the rating.
CRAs must disseminate a press release on their website and notify the stock exchanges and debenture trustees within seven working days of the Rating Committee meeting.
All disclosures must be archived on CRAs’ websites for at least ten years. Specific disclosures, such as the list of non-cooperative issuers, must be updated daily, while others have a specified duration (e.g., 12 months for ratings not accepted by issuers and delayed periodic reviews).
The circular mandates that CRAs should maintain records for ten years, with provisions to share information with debenture trustees upon request. These records must be accessible on the CRA’s website under issuer-specific press releases or rating rationales.
The new regulations will come into effect on August 01, 2024. SEBI is also set to monitor compliance of the new guidelines through the half-yearly internal audits mandated under Regulation 22 of the CRA Regulations.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
