SEBI has released a consultation paper proposing CRAs be allowed to rate financial instruments regulated by other financial-sector authorities—including RBI, IRDAI, PFRDA, MCA, IBBI, and IFSCA. Notably, the proposal covers unlisted securities, which currently fall outside SEBI’s regulatory scope moneycontrol.com+4financialexpress.com+4magzter.com+4.
Highlights of the Proposal:
- CRAs must create a segment-separated business unit with robust “Chinese-wall” protocols, operationally distinct within six months of final notification moneycontrol.com.
- Rating of non-SEBI-regulated instruments must be fee-only and non-fund-based Reuters+2moneycontrol.com+2financialexpress.com+2.
- Firms must establish separate governance, disclosure norms, IT systems, and grievance mechanisms for the new mandate magzter.com+2Reuters+2vidhilegalpolicy.in+2.
Strategic Impact:
- Regulatory coverage expansion: Including unlisted debt and pension bonds boosts regulatory reach and improves transparency.
- Investor confidence: Broader CRA supervision could enhance risk assessment credibility across all debt instruments.
- Regulatory alignment: Reflects SEBI Chair Tuhin Kanta Pandey’s agenda for pragmatic policy updates magzter.comReuters.
The public can submit feedback on the consultation paper until July 30, 2025, after which SEBI may finalise the framework.
Source (full link):
https://www.livemint.com/news/sebi-proposes-broadening-credit-rating-agencies-mandate-amid-regulatory-gaps-rbi-cra-financial-sector-stock-exchanges-11752068671692.html
Disclaimer:
This article is not drafted by any employee of FinMen Advisors. The information is entirely sourced from the above link. FinMen Advisors does not guarantee the accuracy, completeness, or reliability of the information.
