Master Circular for Credit Rating Agencies

SEBI/HO/DDHS/DDHS-POD2/P/CIR/2023/ 111 · 2023-07-03 · Department of Debt and Hybrid Securities

Summary

This section introduces the Master Circular for Credit Rating Agencies, consolidating existing regulations and circulars as of July 3, 2023. It establishes that actions taken under rescinded circulars are deemed valid under this new Master Circular. The document is issued under Section 11(1) of the SEBI Act and Regulation 20 of the CRA Regulations to protect investor interests. Section 2.2 requires acquirers to disclose litigation, regulatory actions, investor complaints, and confirm fee payments and board stability prior to approval. Section 3.1 clarifies that transferring SEBI-regulated business necessitates fresh registration for the transferee and surrender of certificates by the transferor depending on the extent of the transfer. Sections 4.1 through 4.12 prescribe detailed guidelines for Credit Rating Agencies regarding the suspension, cancellation, or surrender of their registration certificates. This section mandates the standardization of rating symbols and definitions for various financial instruments and requires CRAs to align their scales with regulatory guidelines. It outlines specific requirements for the content of a CRA's Operations Manual, including policies on mon

Text

SEBI (CRA) Regulations, 1999 prescribes guidelines for registration of CRAs, general obligations, inspection, investigation and code of conduct.

Master Circular for CRAs has been prepared to enable industry and other users to have access to all applicable circulars/directions at one place.

This Master Circular is a compilation of existing circulars as on July 03, 2023, with consequent changes detailed chapter-wise.

Anything done or any action taken under rescinded circulars prior to rescission shall be deemed to have been done under corresponding provisions of this Master Circular.

Any application made to the Board under rescinded circulars prior to such rescission and pending before it shall be deemed to have been made under corresponding provisions.

This circular is issued in exercise of powers conferred by Section 11 (1) of Securities and Exchange Board of India Act, 1992 read with Regulation 20 of CRA Regulations, 1999.

SEBI has operationalized SEBI Intermediary Portal for intermediaries, inter alia for CRAs, to submit all registration applications online.

All applications for registration/surrender/other requests will be made through SEBI Intermediary Portal only; physical documents required only for records.

All registered CRAs are required to obtain prior approval of SEBI in case of change in control.

In case a CRA holds multiple registrations with SEBI, it shall make only one application to SEBI addressed to Chief General Manager, DDHS.

Whether any action has been initiated / taken under SCRA/SEBI Act or rules and regulations made thereunder? If yes, status thereof along with corrective action taken to avoid such violations in the future. The acquirer shall also confirm that it shall honour all past liabilities / obligations of the applicant, if any.

Whether any investor complaint is pending? If yes, steps taken and confirmation that the acquirer shall resolve the same.

Source: SecMarx — Master Circular for Credit Rating Agencies. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.