Capital markets regulator Sebi on Friday enhanced disclosure rules for credit rating agencies (CRAs) and put in place a framework for rating withdrawal of perpetual debt securities.
The move is aimed at allowing investors and other stakeholders to properly use such disclosures in a fair assessment of CRAs, the Securities and Exchange Board of India (Sebi) said in a circular.
The new framework will be applicable to credit ratings of securities that are already listed or proposed to be listed on a stock exchange.
In order to standardise the methodology pertaining to disclosure of a ‘sharp rating action’, Sebi said CRAs will have to compare two consecutive rating actions.
Further, a CRA will have to disclose a sharp rating action if the rating change between two consecutive rating actions is more than or equal to three notches downward.
The regulator has mandated CRAs to frame detailed guidelines on what constitutes non-cooperation by issuers, which includes non-submission of quarte
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