To facilitate ease of business for credit rating agencies (CRAs), the market regulator SEBI has issued specific timelines for periodic surveillance actions. Previously, timelines were only provided for initial rating reporting. In a circular dated July 4, SEBI outlined new timelines for handling appeals filed by issuers following CRAs’ periodic rating surveillance.
According to the circular, this move aims to standardize the handling of appeals and was developed in consultation with various stakeholders, including CRAs. The new provisions will take effect from August 1, 2024.
Under the new guidelines, the following steps must be followed:
- Communication of the rating to the issuer must be completed within one working day of the Rating Committee meeting.
- If an issuer requests a review or appeals the rating, this process must be completed within three working days of the Rating Committee meeting.
- The press release must be disseminated on the CRA’s website and notified to the stock exchange/debenture trustee within seven working days of the Rating Committee meeting.
Previously, the guideline only specified that the press release should be disseminated within five days of the committee’s meeting, without timelines for issuer appeals.
The new guidelines also detail the periodicity of disclosures on CRA websites. The previous guidelines required CRAs to maintain an archive of all disclosures, including rating press releases, for at least ten years. The updated guidelines specify:
- Daily disclosure of the list of non-cooperative issuers.
- Disclosure of ratings not accepted by an issuer for 12 months.
- Disclosure of delays in periodic reviews for 12 months.
The circular further states that CRAs must maintain records of these disclosures for ten years and share them with Debenture Trustees upon request. Additionally, these disclosures must remain available on the CRAs’ websites under the issuer-specific Press Releases/Rating Rationale section, where applicable.
