SEBI Issues New Guidelines to Improve Efficiency for Credit Rating Agencies

The Securities and Exchange Board of India (SEBI) has introduced new guidelines to enhance the efficiency and ease of operations for credit rating agencies (CRAs).

These guidelines, which come into effect on August 1, aim to streamline the handling of companies' appeals regarding rating decisions made during periodic surveillance.

As per SEBI's circular, CRAs must inform companies of their ratings within one working day following the rating committee meeting. Companies have a three-day period to review or appeal the rating decision.

Additionally, the press release regarding the rating must be published on the CRA's website and notified to the stock exchange or debenture trustee within seven working days of the committee meeting.

CRAs are required to maintain records of these disclosures for ten years and must provide them to debenture trustees upon request. These disclosures must also be available on the CRAs' websites under the issuer-specific press releases/rating rationale section.

SEBI has also set timelines for certain disclosures, such as daily updates on the list of non-cooperative issuers to ensure stakeholders are informed promptly. CRAs must retain information on ratings not accepted by issuers for 12 months.

Compliance will be monitored through the semi-annual internal audit mandated by CRA regulations. This initiative aims to protect investors and foster the growth and regulation of the securities market.

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