SEBI amends circular on credit rating agencies

Market regulator Sebi amended its circular on credit rating agencies on Friday, asking them to draw up a detailed policy by the end of March to deal with the non-receipt of critical information from companies. The Securities and Exchange Board of India (SEBI) issued a revised circular on credit rating agencies, saying that this provision must be completed by March 31, 2023.

In this, rating agencies have been asked to formulate a detailed policy to deal with the situation of non-submission of important information, including quarterly financial statements, by companies. The policy will establish the methodology to assess the risks associated with the unavailability of critical information. Apart from this, if no information is received from the company for three consecutive quarters, you will have to declare it ‘non-cooperative’ and arrange to record that rating within seven days. Prior to this, SEBI had issued an operational circular in January, which was to be implemented from February 1.

But now SEBI has modified it. SEBI has said in the new circular that the managing director or the executive director or the officer who handles the business responsibility of a credit rating agency cannot be a member of the rating committee of an agency. When withdrawing the credit rating of the shares of a listed company, the agency will also issue a press release assigning the rating to it. In this communication, you must give the reason for the withdrawal of the authorization.

Disclaimer:Prabhasakshi has not edited this news. This news has been published from PTI-language feed.