Credit-rating agencies have asked the Ministries of Corporate Affairs and Finance to address a regulatory gap that now leaves more than ₹1 lakh crore of unlisted debt—including corporate bonds, securitised papers and company fixed deposits—outside the jurisdiction of either SEBI or the RBI.
Regulatory vacuum
- SEBI supervises only listed securities.
- RBI oversees bank-issued instruments such as commercial paper and certificates of deposit, but not unlisted debt issued by corporates.
Why it matters
- Investor confidence: Without a clear regulator, the credibility of ratings on these instruments can suffer, raising risk for investors.
- Market stability: Sound, regulated ratings on securitised debt (e.g., pass-through certificates) are essential for lenders to refinance assets and for the market to function smoothly.
What rating agencies propose
- Government guidance clarifying which regulator—SEBI or RBI—will oversee ratings on unlisted corporate debt.
- A consistent supervisory framework to maintain rating quality, tighten oversight and boost transparency in this large market segment.
Disclaimer
This article is not authored or drafted by any employee of FinMen Advisors. The information is entirely sourced from the above news link. FinMen Advisors is not responsible for the accuracy, completeness or reliability of the information.
