Securities and Exchange Board of India (SEBI) issued Circular No. SEBI/HO/DDHS/DDHS-PoD-3/P/CIR/2024/97 on July 4, 2024, to all registered Credit Rating Agencies (CRAs), introducing measures to ease business operations for CRAs by specifying timelines and disclosure requirements. This circular modifies Chapter III of the Master Circular dated May 16, 2024. The updated Para 28.3.3 outlines timelines for CRAs to communicate ratings to issuers within one working day of the Rating Committee meeting, for issuers to request reviews within three working days, and for CRAs to disseminate press releases within seven working days. Additionally, Para 31.1.2 mandates CRAs to maintain an archive of all disclosures on their websites for at least 10 years. Specific disclosures, such as the list of non-cooperative issuers, ratings not accepted by issuers, and delays in periodic reviews, have designated periods for publication. These records must be shared with Debenture Trustees upon request and kept under the issuer-specific Press Releases/Rating Rationale section. The circular takes effect on August 1, 2024, and its implementation will be monitored through the half-yearly internal audits as per CRA Regulations. This initiative aims to protect investor interests and enhance the regulatory framework of the securities market.
Securities and Exchange Board of India
Circular No. SEBI/HO/DDHS/DDHS-PoD-3/P/CIR/2024/97 Dated: July 04, 2024
To,
All Registered Credit Rating Agencies (CRAs),
Dear Sir/ Madam,
Sub: Measures for Ease of Doing Business for Credit Rating Agencies (CRAs) – Timelines and Disclosures
(Modification to Chapter III of the Master Circular for Credit Rating Agencies dated May 16, 2024)
1. Para 28.3.3 of the Master Circular for CRAs – SEBI/HO/DDHS/DDHS-POD3/P/CIR/2024/47 dated May 16, 2024 (“Master Circular”), prescribes the timeline to be followed by CRAs for dissemination of Press Release on CRA’s website and intimation of the same to Stock Exchanges/ Debenture Trustees, pursuant to rating committee meeting in respect of periodic surveillance of ratings.
2. In order to promote Ease of Doing Business and bring about uniformity in dealing with appeals, based on consultation with stakeholders including CRAs, 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. Accordingly, Para 28.3.3 shall stand modified as follows:
Periodic surveillance
| Scenario | Timeline – immediately but not later than |
| Communication of the rating to the issuer | 1 working day* of the Rating Committee meeting |
| Request for review/ appeal of rating by the Issuer | 3 working days of the Rating Committee meeting |
| Dissemination of Press Release on CRA’s website and intimation of the same to Stock Exchange/ Debenture Trustee | 7 working days of the Rating Committee meeting |
* While an outer timeline of 1 working day has been specified, CRAs shall endeavor to communicate the rating to the issuer on the same day as the Rating Committee meeting.
3. Para 31.1.2 of the Master Circular is as under:
“An archive of all disclosures should be maintained by CRAs on their website, for at least 10 years. This also includes ratings press releases by CRAs”.
However, the disclosures mentioned below shall be made as per the period/ frequency specified for the respective disclosure in the Master Circular:
3.1. Disclosure of list of non-cooperative issuers – Daily (Para 11.6 of the Master Circular)
3.2. Disclosures in case of rating not accepted by an issuer – 12 months (Para 28.5.2 of the Master Circular)
3.3. Disclosure in case of delay in periodic review – 12 months (Para 28.6 of the Master Circular)
4. CRAs shall continue to maintain records in respect of the said disclosures for a period of 10 years, which may be shared with Debenture Trustees upon request. Further, disclosures in respect of the said aspects shall continue to be made available by the CRAs on their website under the issuer-specific Press Releases/ Rating Rationale section of the respective issuer, wherever applicable.
5. Applicability: The circular shall be applicable with effect from August 01, 2024.
6. Monitoring: Monitoring of this circular shall be done in terms of the half-yearly internal audit for CRAs, mandated under Regulation 22 of the CRA Regulations and circulars issued thereunder.
7. 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
