SEBI Issues New Guidelines to Enhance Credit Rating Agency Operations

Markets regulator SEBI has issued new guidelines to streamline operations and enhance the ease of doing business for credit rating agencies. The circular introduces specific timelines for dealing with appeals made by companies regarding rating actions carried out during periodic surveillance of ratings.

Timelines for disclosures

SEBI has introduced precise timelines for disclosures, including daily updates on a list of non-cooperative issuers to notify stakeholders about entities not cooperating with rating agencies promptly. CRAs must retain information on ratings not accepted by issuers for a period of 12 months. SEBI emphasised that compliance with these guidelines will be monitored through biannual internal audits of credit rating agencies, as mandated under CRA norms. These measures aim to safeguard investor interests and promote the orderly development and regulation of the securities market.

Aim of SEBI

The Securities and Exchange Board of India (SEBI) has released new guidelines aimed at streamlining operations and improving the business environment for credit rating agencies. According to the circular issued on June 4, these guidelines include the introduction of specific timelines for handling appeals from companies regarding rating actions conducted during regular surveillance of ratings. These changes will come into effect on August 1, 2024.

Specific timelines for dealing with appeals

“In order to promote ease of doing business and bring about uniformity in dealing with appeals, based on consultation with stakeholders, including CRAs (Credit Rating Agencies), it has been decided to provide specific timelines for dealing with appeals made by the issuer in respect of rating actions carried out pursuant to periodic surveillance of ratings,” the circular reads.