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[SEBI] Master Circular - Credit Rating Agencies (CRA)

SEBI, vide circular no. SEBI/HO/MIRSD/DOP2/CIR/P/2018/76 dated May 02, 2018, has issued the Master Circular for Credit Rating Agencies. The pdf copy of the said Master Circular is available at SEBI website >> Legal >> Master Circulars.

Securities and Exchange Board of India (SEBI) has been issuing various circulars/ guidelines from time to time. In order to enable the industry and other users to have access to all the applicable circulars/ directions at one place, Master Circular for Credit Rating Agencies (CRAs) has been prepared.

This Master Circular is a compilation of the circulars issued by SEBI up to March 31, 2018, which are operational as on the date of this circular.

In case of any inconsistency between the Master Circular and the applicable circulars, the contents of the relevant circular shall prevail.

The Master Circular is a compilation of all the existing/ applicable circulars issued by the Market Intermediaries Regulation and Supervision Department of SEBI to CRAs. Efforts have been made to incorporate applicable provisions of existing circulars issued by other Departments of SEBI relevant to CRAs.

The Master Circular contents the followings:

SECTION 1: REGISTRATION REQUIREMENTS
1.1 Online Registration Mechanism for Securities Market Intermediaries
1.2 Digital Mode of Payment
1.3 Grant of Prior approval for change in control to Credit Rating Agencies
1.4 Surrender of Certificate of Registration

SECTION 2: RATING OPERATIONS
2.1 Standardization of Rating Symbols and Definitions
2.2 Operations Manual/ Internal governing document
2.3 Rating Process
2.4 Monitoring and Review of Ratings
2.5 Standardization of Press Release for Rating Actions
2.6 Rating Agreement between the Issuer and the CRA
2.7 Dealing with Conflict of interest
2.8 Unsolicited Credit Ratings
2.9 Policy in respect of non-co-operation by the issuer
2.10 Withdrawal of ratings
2.11 Sharing of information regarding issuer companies between Debenture Trustees and Credit Rating Agencies
2.12 Rating of instruments other than “securities”

SECTION 3: REPORTING AND DISCLOSURES
3.1 Default Studies
3.2 Periodic Disclosures
3.3 Continuous Disclosures and Reporting
3.4 Rating Criteria, Rating Process and their Disclosure
3.5 Periodical report to be submitted to SEBI
3.6 Centralized Database for Corporate Bonds/ Debentures

SECTION 4: INTERNAL AUDIT FOR CREDIT RATING AGENCIES (CRAs)
4.1 Internal Audit for Credit Rating Agencies (CRAs)
4.2 Requirements related to Internal Audit of CRAs

SECTION 5: REDRESSAL OF INVESTOR GRIEVANCES
5.1 Designated e-mail ID for regulatory communication with SEBI
5.2 Redressal of investor grievances through SEBI Complaints Redress System (SCORES) platform
5.3 Information regarding Grievance Redressal Mechanism

SECTION 6: OTHERS
6.1 Guidelines on Outsourcing of Activities by Credit Rating Agencies
6.2 Unauthenticated news circulated by SEBI Registered Market Intermediaries through various modes of communication
6.3 General Guidelines for dealing with Conflicts of Interest of Credit Rating Agencies and their Associated Persons in Securities Market


SCHEDULE: List of Circulars

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