Regulation 28 - Credit rating agencies - International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2025

28. Credit rating agencies (1) A registered credit rating agency shall enter into a written agreement with each client whose securities or other permitted financial products it proposes to rate, and every such agreement shall include the right and liabilities of each party and fee to be charged by such credit rating agency. (2) The client shall provide all co-operation required for arriving at a true and accurate rating of the securities or other permitted financial products by a registered credit rating agency. (3) A registered credit rating agency shall inform to the client the rating assigned to the securities or other permitted financial products. (4) A registered credit rating agency shall continuously monitor the rating of securities or other permitted financial products and carry out periodic reviews of the rating, unless the rating is withdrawn. (5) A registered credit rating agency shall generally not withdraw a rating so long as the obligations under the security /instrument/ facility rated by it are outstanding: Provided that a registered credit rating agency may withdraw a rating in the following situations: (a) Where the entity whose security/instrument/facility is rated is wound up or merged or amalgamated with another entity, (b) In case of non-cooperation from the issuers, or non-payment of agreed fee, (c) At the request of an issuer, except where such request might give rise to avoiding an imminent rating change, or (d) Where such credit rating agency is constrained from providing service due to events beyond its control: Provided further that the reason for withdrawal of rating shall be mentioned in the press release issued by the registered credit rating agency withdrawing such rating. (6) A registered credit rating agency shall disseminate information regarding change in ratings promptly through press releases and simultaneously to the recognised stock exchanges (if the securities or other permitted financial products are listed on a recognised stock exchange in an IFSC). (7) A registered credit rating agency shall make public the definitions of the concerned rating, along with the symbol and also state that the ratings do not constitute recommendations to buy, hold or sell any securities or other permitted financial products. (8) A registered credit rating agency shall make available to the general public, the information relating to the rationale of the ratings, which shall cover an analysis of various underlying factors. (9) A registered credit rating agency shall specify the rating process and file a copy of the same to the Authority for record. (10) A registered credit rating agency shall have professional rating committees, comprising members who are adequately qualified and knowledgeable to assign a rating, and all rating decisions shall be taken by the said committee. (11) A registered credit rating agency shall exercise due diligence to ensure that the rating given by it is fair and appropriate. (12) A registered credit rating agency shall not rate securities or other permitted financial products issued by it or any of its group entity. (13) A registered credit rating agency shall have appropriate procedures and systems for preventing trading on the basis of unpublished price sensitive information obtained by them in the course of any professional assignment.