To,
All Credit Rating Agencies registered with SEBI
Standardisation of Ratings Scales Used by credit rating agencies – Extension of timeline for implementation
- SEBI instructed credit rating agencies to either align their rating scales with the rating scales established under the SEBI/HO/MIRSD/MIRSD_CRADT/P/CIR/2021/594 circular dated July 16, 2021 in order to standardise the use of rating scales.Regulation (f) of the Financial Services Act establishes criteria for each financial sector regulator or body.In the absence of the SEBI (Credit Rating Agencies) Regulations, 1999, ratings should be followed,scales set out in the Board’s circular dated June 15, 2011, or any other scales set forth in the Board’s circular dated June 13, 2019, or any other scales set forth in the Board’sBy March 31, 2022, the Board will have published a circular.
- Credit rating agencies have submitted requests for an extension of the date on which the requirements of section B of the aforementioned circular become effective.
- It has been decided to prolong the date of application of section B of the aforementioned circular due to representations received from credit rating agencies.On or before June 30, 2022, credit rating agencies must ensure compliance with the requirements/ conditions of section B of the aforementioned circular.
- This circular is issued in the exercise of the powers conferred on the Securities and Exchange Board of India by Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with the provisions of Regulation 20 of the Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999, to protect the interests of investors in securities and to promote the development and regulation of the securities market.
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