Sebi issues framework for dealing with suspension of rating agencies
Mumbai, October 13, 2022
The Securities and Exchange Board of India (Sebi) has issued a framework for dealing with suspension, cancellation or surrendering of license of credit rating agencies (CRAs) to ensure orderly migration of the ratings.
The regulator has directed CRAs to disclose prominently on their website Sebi’s order on suspension or cancellation. Further, allow their clients to withdraw any assignment given to the CRA, without any additional cost. Also, not take any new clients or fresh mandates.
“In case of cancellation of certificate of registration, the credit ratings assigned by the CRA shall be valid till such time the client withdraws the assignment or migrates the assignment to other CRA, whichever is earlier,” Sebi has said in a circular.
However, in case of suspension of certificate, the credit ratings assigned by the CRA shall not be valid during the period of suspension.
Earlier this month, Sebi had cancelled the recognition certificate granted to Brickwork Ratings India, one of the seven registered credit rating agencies (CRAs) in the country, for “failing to discharge its duties.”
[The Business Standard]