{"id":3100,"date":"2022-08-26T07:39:44","date_gmt":"2022-08-26T07:39:44","guid":{"rendered":"https:\/\/rvkassociates.com\/blog\/?p=3100"},"modified":"2022-08-26T07:39:46","modified_gmt":"2022-08-26T07:39:46","slug":"enhanced-disclosures-by-cras-and-norms-on-rating-withdrawal","status":"publish","type":"post","link":"https:\/\/rvks.in\/blogs\/enhanced-disclosures-by-cras-and-norms-on-rating-withdrawal\/","title":{"rendered":"Enhanced Disclosures by CRAs and Norms on Rating Withdrawal"},"content":{"rendered":"\n

August 25, 2022<\/p>\n\n\n\n

To
All Credit Rating Agencies (CRAs) registered with SEBI
Dear Sir\/ Madam,<\/p>\n\n\n\n

i. SEBI (Credit Rating Agencies) Regulations, 1999 (\u201cCRA Regulations\u201d) provide for a principle-based regulation of CRAs focusing inter alia on enhanced transparency and disclosures by CRAs. Over time, SEBI has prescribed various disclosures under different circulars under the CRA Regulations.<\/p>\n\n\n\n

ii. In order to allow investors and other stakeholders to properly use such disclosures in a fair assessment of CRAs, the following changes are being suggested for disclosures made by CRAs.<\/p>\n\n\n\n

iii. Applicability : 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.<\/p>\n\n\n\n

IV. Methodology for Computation of Sharp Rating Action<\/strong><\/p>\n\n\n\n

A. SEBI circular numbered SEBI\/ HO\/ MIRSD\/ DOS3\/ CIR\/ P\/ 2018\/ 140 dated November 13, 2018 had inter alia mandated CRAs to furnish data on sharp rating actions in investment grade rating category, as per the format in Annexure A of the aforesaid circular, to Stock Exchanges and Depositories for
disclosure on website on half-yearly basis.<\/p>\n\n\n\n

B. In order to standardize the methodology of computation and disclosure of a \u2018sharp rating action\u2019, it is clarified that CRAs shall compare two consecutive rating actions. Therefore, a CRA shall disclose a sharp rating action, if the rating change between two consecutive rating actions is more than or equal to
3 notches downward. In other words, if the difference in credit rating between two consecutive press releases is more than or equal to 3 notches downward, the same has to be included in the disclosure on sharp rating actions.<\/p>\n\n\n\n

c. The disclosure on sharp rating actions shall be limited to credit ratings referred at Section III above.<\/p>\n\n\n\n

d. In addition to the current disclosures of sharp rating actions excluding noncooperative issuers, CRAs shall also separately disclose sharp rating actions including such actions on non-cooperative issuers.<\/p>\n\n\n\n

  1. V. Issuers Not Cooperating (INC) and information required for rating<\/strong>
    1. A. SEBI Circular dated November 01, 2016 inter-alia prescribed certain norms regarding policy in respect of non-co-operation by the issuer, including mandating each CRA to frame detailed guidelines on what constitutes noncooperation.<\/li>
    2. B. In continuation to the same, CRAs shall have a detailed policy in this respect which shall include the following :
      1. i. Non-submission of material information including (but not limited to) the following :
        1. a. Non-submission of quarterly financial results or performance results or audited financial results within prescribed timelines.
          b) Current and past operational details including details about capex plans<\/li>
        2. c) Debt obligations and repayment details<\/li>
        3. d) Any other issue felt appropriate by credit rating agency as per internal assessment or as laid down by CRA in its internal policy\/manual.<\/li><\/ol><\/li>
        4. ii. The criteria\/ methodology in respect of assessing the risk of non-availability of information from the issuers including non-cooperative issuers.
          iii. The steps to be taken under various scenarios in order to ascertain the status of non-cooperation by the issuer company.<\/li><\/ol><\/li><\/ol><\/li><\/ol>\n\n\n\n

          To Read More….
          Click the link below….<\/strong><\/p>\n\n\n\n

          Circular :<\/strong> https:\/\/www.dropbox.com\/s\/6gtol56xbdw8q30\/Enhanced%20Disclosures%20by%20CRAs%20and%20Norms%20on%20Rating%20Withdrawal.pdf?dl=0<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

          August 25, 2022 ToAll Credit Rating Agencies (CRAs) registered with SEBIDear Sir\/ Madam, i. SEBI (Credit Rating Agencies) Regulations, 1999 (\u201cCRA Regulations\u201d) provide for a principle-based regulation of CRAs focusing inter alia on enhanced transparency and disclosures by CRAs. Over time, SEBI has prescribed various disclosures under different circulars under the CRA Regulations. ii. In […]<\/p>\n","protected":false},"author":1,"featured_media":2570,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10,85],"tags":[88],"class_list":["post-3100","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-circulars","category-sebi","tag-sebi"],"_links":{"self":[{"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/posts\/3100","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/comments?post=3100"}],"version-history":[{"count":1,"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/posts\/3100\/revisions"}],"predecessor-version":[{"id":3101,"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/posts\/3100\/revisions\/3101"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/media\/2570"}],"wp:attachment":[{"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/media?parent=3100"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/categories?post=3100"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/tags?post=3100"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}