Securities and Exchange Board of India (SEBI) has issued Circular No. SEBI/HO/DDHS/DDHS-POD3/P/CIR/2024/102, effective immediately, allowing Credit Rating Agencies (CRAs) to undertake rating activities under the guidelines of the International Financial Services Centres Authority (IFSCA) within the IFSC-GIFT City. This inclusion of IFSCA as a financial sector regulator means that any issues arising from CRAs’ activities in the IFSC will now fall under IFSCA’s jurisdiction, including handling complaints and enforcement actions. This circular was issued to regulate and enhance the development of the securities market in line with SEBI’s powers.
Securities and Exchange Board of India
Circular No. SEBI/HO/DDHS/DDHS-POD3/P/CIR/2024/102 Dated: July 19, 2024
To
All Registered Credit Rating Agencies (CRAs),
Dear Sir/ Madam,
Sub: Enabling Credit Rating Agencies (CRAs) to undertake rating activities under IFSCA
1. In terms of Regulation 9(f) of SEBI (Credit Rating Agencies) Regulations, 1999 (‘CRA Regulations’), Para 25 of the Master Circular for CRAs dated May 16, 2024 provides that CRAs may undertake the rating of financial instruments under the respective guidelines of the financial sector regulators/ authorities. To enable CRAs to undertake rating activities in the International Financial Services Centre – Gujarat International Finance Tech-city (IFSC-GIFT City), International Financial Services Centres Authority (IFSCA) is hereby added to the list of financial sector regulators/ authorities as specified in Annexure 19 of the aforesaid Master circular.
2. In line with the above provision, it is specified that the ratings undertaken by a CRA under the guidelines of IFSCA shall be under the purview of IFSCA. Accordingly:
2.1. Any issue arising from the activities of such SEBI registered CRAs in the IFSC shall be dealt with by IFSCA under the powers exercisable under Section 12 and 13 of IFSCA Act and regulations and subsidiary instructions made thereunder.
2.2. IFSCA shall be responsible for dealing with complaints, enforcement actions and furnishing information to third parties, including statutory or judicial bodies, in respect to the services provided by the CRAs in the IFSC.
3. The circular shall be applicable with immediate effect.
4. This circular is issued with the approval of competent authority, in exercise of the powers conferred by Section 11 (1) of Securities and Exchange Board of India Act, 1992 read with the provisions of Regulation 20 of CRA Regulations to protect the interest of investors in securities and to promote the development of, and to regulate, the securities market.
Yours faithfully,
Sarika Kataria
Deputy General Manager
Department of Debt and Hybrid Securities
Tel No.022-2644-9411
Email ID – sarikak@sebi.gov.in
