Credit Ratings supported by Credit Enhancement (CE)

September 28, 2022

To
All Credit Rating Agencies (CRAs) registered with SEBI
Dear Sir/ Madam,

I. SEBI circular SEBI/ HO/ MIRSD/ DOS3/ CIR/ P/ 2019/ 70 dated June 13, 2019 had inter alia mandated various measures in reference to credit ratings of securities having explicit credit enhancement feature. In view of recent developments and deliberations with various stakeholders, to provide for enhanced transparency and improved rating process for CE-ratings, SEBI’s measures for CE-ratings are being reviewed.

1. II. Applicability :
2. 1. A. 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.
   3. B. The circular shall be applicable with effect from January 1, 2023, and CRAs shall report on their compliance with this circular (as ratified by their respective board of directors) to SEBI within one quarter from the date of applicability of this circular.

III Subject to the measures specified in aforesaid SEBI circular dated June 13, 2019, on CE-ratings, it is reiterated that credit ratings pertaining to Para II(A) above, where the credit enhancement is external (or from third party), but the rated security is not bankruptcy remote of the issuer/ originator, will carry the
‘CE’ suffix. A list of such support considerations for CE-suffix is specified at Annexure A

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Circular : https://www.dropbox.com/s/8isk7k73ahu2xh5/Credit%20Ratings%20supported%20by%20Credit%20Enhancement%20%28CE%29.pdf?dl=0