Relaxation from compliance with certain provisions of the circulars issued under SEBI Credit Rating Agencies Regulations, 1999 due to the COVID-19 pandemic and moratorium permitted by RBI
Summary
SEBI grants temporary relaxations to Credit Rating Agencies regarding default recognition and disclosure timelines due to the COVID-19 pandemic and RBI's moratorium. CRAs are permitted to exclude defaults arising solely from lockdown conditions or loan deferments from their rating actions. Additionally, deadlines for press releases and website disclosures are extended to accommodate operational challenges.
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a differentiation in treatment of default, on a case to case basis, needs to be made as to whether such default occurred solely due to the lockdown or loan moratorium.
if the CRA is of the view that the delay in payment of interest/principle has arisen solely due to the lockdown conditions creating temporary operational challenges... CRAs may not consider the same as a default event and/or recognize default.
Appropriate disclosures in this regard shall be made in the Press Release.
The above shall also be applicable on any rescheduling in payment of debt obligation done by the issuer, prior to the due date, with the approval of the investors/lenders.
The above relaxation is extended till the period of moratorium by the RBI.
relaxation from timelines for rating action/ issue of press release by CRAs stipulated vide SEBI circular dated June 30, 2017 is being granted.
CRAs should endeavour to finish the exercise on a best effort basis. Such cases shall be put up for ratification by the Rating Sub-Committee of the Board of CRA.
an extension of 30 days is being granted for making annual and semi-annual disclosures by CRAs on its website for the period ended March 2020.
This circular is issued 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 SEBI (Credit Rating Agencies) Regulations, 1999.
Source: SecMarx — Relaxation from compliance with certain provisions of the circulars issued under SEBI Credit Rating Agencies Regulations, 1999 due to the COVID-19 pandemic and moratorium permitted by RBI. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.