SEBI Introduces New Guidelines To Enhance Credit Rating Agency Operations

One of the changes introduced by SEBI is the establishment of specific timelines for various actions taken by CRAs. Previously, timelines were only specified for the initial rating reporting. The new guidelines now extend these timelines to cover periodic surveillance of ratings and subsequent appeals by issuers.

Under the new framework, CRAs must communicate the rating to the issuer within one working day following the Rating Committee meeting. If an issuer wishes to appeal or request a review of the rating, this must be completed within three working days of the committee meeting.

The guidelines also specify the timelines for disseminating rating information to the public. CRAs are required to publish a press release on their website and notify the stock exchange or debenture trustee within seven working days of the Rating Committee meeting.

SEBI has mandated that CRAs maintain an archive of all disclosures on their websites for at least ten years. This includes rating press releases and other relevant information. The new guidelines states the periodicity of these disclosures and requires daily updates of the list of non-cooperative issuers and maintaining records of ratings not accepted by issuers for twelve months. Similarly, any delays in periodic reviews must be disclosed and retained for twelve months.

To ensure compliance, SEBI has included provisions for monitoring these guidelines through the semi-annual internal audits required by CRA regulations.

1. Communication of Rating: CRAs must communicate the rating to the issuer within one working day of the Rating Committee meeting.

2. Appeal Process: Issuers have a three-day window to request a review or appeal the rating decision. The appeal process must be completed within three working days of the committee meeting.

3. Press Release: A press release must be disseminated on the CRA's website and notified to the stock exchange or debenture trustee within seven working days of the committee meeting.

4. Disclosure Requirements:
• Daily updates of the list of non-cooperative issuers.
• Maintain records of ratings not accepted by issuers for twelve months.
• Disclose and retain information on delays in periodic reviews for twelve months.

5. CRAs must maintain an archive of all disclosures on their websites for at least ten years. These records must be available to debenture trustees upon request.

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