SEBI issues clarification on monitoring and review of ratings by CRAs
Published: Jul 01, 2017
By TIOLCORP News Service
MUMBAI, JULY 01 2017: The Securities and Exchange Board of India (SEBI) issues clarifications in respect of monitoring mechanism, disclosure norms and timelines and brought to the attention of Credit Rating Agencies (CRAs) for compliance. SEBI observed that there have been instances where CRAs have not taken cognizance of information regarding delays in servicing debt obligations by the issuer, even though the information has already been discontinued by the market.
As responsible institutions, and as per Regulation 15 of SEBI (CRAs) Regulations, 1999, CRAs are required to continuously monitor the rating of securities and disseminate information regarding newly assigned ratings, and changes in earlier rating promptly through press releases on web sites of CRAs as well as all the stock exchanges.
The regulator has asked rating agencies to track the servicing of debt obligations for each instrument rated by them and shall carry out a review of the ratings upon announcement of news or material events.
SEBI has asked CRAs to look for potential deterioration in financials which might lead to defaults, delays in servicing of debt. The regulator has also confirmed that the issuers must provide CRAs with no default statement each month.