TMI BlogEnhanced Disclosures by CRAs and Norms on Rating WithdrawalX X X X Extracts X X X X X X X X Extracts X X X X ..... rly use such disclosures in a fair assessment of CRAs, the following changes are being suggested for disclosures made by CRAs. III. Applicability : This circular shall be applicable to credit ratings of securities that are listed, or proposed to be listed, on a recognized stock exchange, and other credit ratings that are required under various SEBI Regulations or circulars thereunder. IV. Methodology for Computation of Sharp Rating Action A. SEBI circular numbered SEBI/ HO/ MIRSD/ DOS3/ CIR/ P/ 2018/ 140 dated November 13, 2018 had inter alia mandated CRAs to furnish data on sharp rating actions in investment grade rating category, as per the format in Annexure A of the aforesaid circular, to Stock Exchanges and Depositories f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce results or audited financial results within prescribed timelines b) Current and past operational details including details about capex plans c) Debt obligations and repayment details d) Any other issue felt appropriate by credit rating agency as per internal assessment or as laid down by CRA in its internal policy/manual. ii. The criteria/ methodology in respect of assessing the risk of non-availability of information from the issuers including non-cooperative issuers. iii. The steps to be taken under various scenarios in order to ascertain the status of non-cooperation by the issuer company. C. CRAs shall follow a uniform practice of three consecutive months of non-submission of No-default Statement (NDS) (or inabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ratings of perpetual debt securities that are listed or proposed to be listed on a recognized stock exchange, it is proposed to revise withdrawal norms of ratings of such securities. Accordingly, a CRA may withdraw ratings of such securities provided that the CRA has: i. rated such security/ies continuously for 5 years; and ii. received an undertaking from the Issuer that a rating is available on such security/ies; and iii. received an undertaking from the other CRA(s) that a rating is available on such security/ies. VIII. Disclosure of Average Rating Transition Rates for Long-Term Credit Ratings A. SEBI circular numbered SEBI/ HO/ MIRSD/ DOS3/ CIR/ P/ 2018/ 140 dated November 13, 2018 has inter alia mandated CRAs to dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are upgraded from D shall be considered as new rating for the relevant subsequent static pools. D. In the disclosure at C.(ii) above, a CRA shall include an additional column to indicate the proportion of ratings that were withdrawn during the financial year. IX. Enhanced Disclosures by CRAs A. In order to facilitate enhanced transparency and usability of disclosures made by CRAs on their websites, the following is proposed: i. Disclosures required by CRAs on their websites under various SEBI circulars should be provided in excel / machine readable format. ii. An archive of disclosures should be maintained by CRAs on their website, for at least 10 years. This also includes ratings press releases by CRAs. B. In ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclosures for Financial Year 2022-23 IX. Enhanced Disclosures by CRAs Website Disclosures made after March 31, 2023 XI. This circular is issued with the approval of the competent authority. XII. 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 , to protect the interest of investors in securities and to promote the development of, and to regulate, the securities market. Yours faithfully, Deena Venu Sarangadharan Deputy General Manager Department of Debt and Hybrid Securities ..... X X X X Extracts X X X X X X X X Extracts X X X X
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