The Securities and Exchange Board of India has released new guidelines to streamline operations and improve business ease for credit rating agencies. The circular outlines specific timelines for handling companies' appeals regarding rating decisions made during periodic surveillance.
These changes will take effect from Aug. 1, as stated in SEBI's circular issued on Thursday.
SEBI has set specific timelines for dealing with appeals from issuers about rating actions carried out during periodic surveillance. CRAs must communicate ratings to companies within one working day of the rating committee meeting. Companies will have a three-day window to review or appeal the rating decision. The press release must be published on the CRA's website and notified to the stock exchange or debenture trustee within seven working days of the rating committee meeting.
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CRAs are required to keep records of these disclosures for ten years and must make them available to debenture trustees upon request. Disclosures must also be available on the CRAs' websites under the issuer-specific press releases/rating rationale section, where applicable.
SEBI has outlined timelines for certain disclosures, such as updating the list of non-cooperative issuers daily. This ensures stakeholders are promptly informed about issuers who do not cooperate with rating agencies. Credit rating agencies must retain information on ratings not accepted by issuers for 12 months. Compliance will be monitored through the semi-annual internal audit required by CRA regulations.
This procedure aims to protect investors and promote the growth and regulation of the securities market.
(With inputs from PTI.)
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