Measures for Ease of Doing Business for Credit Rating Agencies (CRAs) – Timelines and Disclosures
Summary
This circular modifies the Master Circular for Credit Rating Agencies to establish specific timelines for handling appeals related to periodic surveillance ratings. It mandates that CRAs communicate ratings within one working day, allow three days for issuer appeals, and disseminate press releases within seven working days of the rating committee meeting. Additionally, it clarifies disclosure retention periods and specifies that monitoring will occur through half-yearly internal audits.
Text
Para 28.3.3 shall stand modified as follows: Communication of the rating to the issuer - immediately but not later than 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.
The disclosures mentioned below shall be made as per the period/frequency specified for the respective disclosure in the Master Circular: Disclosure of list of non-cooperative issuers – Daily; Disclosures in case of rating not accepted by an issuer – 12 months; Disclosure in case of delay in periodic review – 12 months.
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.
The circular shall be applicable with effect from August 01, 2024.
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.
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.
Source: SecMarx — Measures for Ease of Doing Business for Credit Rating Agencies (CRAs) – Timelines and Disclosures. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.