Sebi Modifies Credit Rating Agency Rules

New Delhi: Capital markets regulator Sebi has revised timelines for credit rating agencies (CRAs) to enhance the ease of doing business by introducing the term ‘working days’ instead of ‘days’ for compliance deadlines.In a circular issued on Tuesday, the markets watchdog an-nounced changes in rules for CRAs aimed at standardising rating processes and publication pro-tocols.

These changes follow recommendations from a working group on CRAs that highlighted the challenges posed by existing timelines, especially during non-working days. “One of the recom-mendations of the Working Group of CRAs for ease of doing business pertains to modification of approach on specifying timelines from ‘days’ to ‘working days’ in respect of certain require-ments,” Sebi said.

Under the revised rules, the regulator said credit rating agencies are required to publish press re-leases on rating actions within seven working days of the relevant event, replacing the previous mandate of seven calendar days. Similarly, for reviewing ratings in cases of delays in debt servic-ing, the timeline has been adjusted to two working days from two calendar days, the Securities and Exchange Board of India (Sebi) said. In addition, Sebi has revised the timeframe for tagging ratings as “Issuer Not Cooperating” due to three consecutive months of non-submission of a no-default statement (NDS). Credit rating agencies must now take this action within five working days against seven calendar days earlier.