The SEBI has notified SEBI (Credit Rating Agencies) (Amendment) Regulations, 2021 to amend the existing SEBI (Credit Rating Agencies) Regulations, 1999 vide Notification No. SEBI/LAD-NRO/GN/2021/29 dated 03rd August 2021 which shall come into force as on the date of its publication in the Official Gazette.
| Sr. No. | Amendment | Effect |
| 1 | Substitution: Regulation 2(1)(d) the words and symbols “clause (7) of section 2 of the Companies Act, 1956 (1 of 1956)” shall be replaced with the words and symbols “clause (11) of section 2 of the Companies Act, 2013 (18 of 2013)” | To bring in line with the Companies Act, 2013. |
| 2 | Substitution: Regulation 2(1)(eii)(i) the words and symbols “Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997” shall be replaced with the words and symbols “regulations framed under clause (h) of sub-section (2) of section 11 of the Act”. | – |
| 3 | Substitution: Regulation 2(1)(g) the words and symbols “Companies Act, 1956 (1 of 1956)” shall be replaced with the words and symbols “Companies Act, 2013 (18 of 2013)”. | To bring in line with the Companies Act, 2013. |
| 4 | Substitution: Regulation 2(1)(h) the words “offered by way of public or rights issue” shall be replaced with the words “that are listed or proposed to be listed on a stock exchange recognized by the Board”. | Earlier, the definition covered only offer i.e., securities which are proposed to be listed. The amendment aims to cover both types of securities, i.e., already listed securities and proposed to be listed. |
| 5 | Substitution: Regulation 2(1)(t) the words and symbols “section 6 of the Companies Act, 1956 (1 of 1956)” shall be replaced with the words and symbols “section 2(77) of the Companies Act, 2013 (18 of 2013)”. | To bring in line with the Companies Act, 2013. |
| 6 | Substitution: Regulation 2(2)
The words and expressions used and not defined in these regulations but defined in the Act, the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Companies Act, 2013 (18 of 2013), or any rules or regulations made thereunder shall have the same meanings respectively assigned to them in those Acts, rules or regulations made thereunder or any statutory modification or re-enactment thereto, as the case may be. |
In the existing provision, reference was given only to the SEBI Act. The aim of this amendment is to widen the scope of reference and include SCRA and the Companies Act, 2013. |
| 7 | Substitution: Regulation 4(a)
the words and symbols “Section 4A of the Companies Act, 1956 (1 of 1956)” shall be replaced with the words and symbols “Section 2(72) of the Companies Act, 2013 (18 of 2013)”. |
To bring in line with the Companies Act, 2013. |
| 8 | Substitution: Regulation 5(a)
the words and symbols “Companies Act, 1956 (1 of 1956)” shall be replaced with the words and symbols “Companies Act, 2013 (18 of 2013)”. |
To bring in line with the Companies Act, 2013. |
| 9 | Substitution: Regulation 9(f)
the words “offered by way of public or rights issue” shall be replaced with the words “that are listed or proposed to be listed on a stock exchange recognized by the Board”. |
Earlier, the condition covered only offer i.e., securities which are proposed to be listed. The amendment aims to cover both types of securities, i.e., already listed securities and proposed to be listed. |
| 10 | Insertion: before the proviso to Regulation 9(f)
Explanation: For the purposes of this clause, the ratings undertaken by a credit rating agency under the respective guidelines of a financial sector regulator or authority shall be under the purview of the respective financial sector regulator or authority. |
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| 11 | Substitution: Regulation 29(2)(c)
to investigate into complaints received from investors, clients or any other person on any matter having a bearing on activities of credit rating agency in so far as the complaints relate to the rating of securities that are listed or proposed to be listed on a stock exchange recognized by the Board. |
The power of investigation by the Board under this clause is restricted to the complaints that relate to the rating of securities that are listed or proposed to be listed on a RSE. |
Disclaimer: The author is based in Jabalpur and is a Practicing Company Secretary dealing in Corporate, Legal & Taxation services. The information contained in this write up, as provided by the author, is to provide a general guidance to the intended user. The information should not be used as a substitute for specific consultations. Author recommends that professional advice is sought before taking any action on specific issues.
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