CIRCULAR
SEBI/HO/DDHS/DDHS-PoD-3/P/CIR/2025/002 January 07, 2025
To,
All Registered Credit Rating Agencies,
All Registered Debenture Trustees,
Issuers who have listed and/or proposed to be listed Non-Convertible
Securities, Securitized Debt Instruments, Security Receipts, Municipal Debt
Securities or Commercial Paper
Recognized Stock Exchanges,
All Depositories registered with SEBI
Madam/ Sir,
Sub: Measures for Ease of Doing Business for Credit Rating Agencies (CRAs)
–Timelines
(Modification to Chapter II and Chapter III of the Master Circular for Credit Rating
Agencies dated May 16, 2024)
1. The Master Circular for CRAs SEBI/HO/DDHS/DDHS-POD3/P/CIR/2024/47 dated
May 16, 2024 (“Master Circular”), inter alia, prescribes certain timelines to be
followed by CRAs for review of ratings and publication of press release.
2. One of the recommendations of the Working Group of CRAs for Ease of Doing
Business (“WG”) pertains to modification of approach on specifying timelines from
“days” to “working days” in respect of certain requirements prescribed in the Master
Circular. The WG submitted the process flow involved in complying with the
relevant requirements within the extant timelines. Further, CRAs depend on
external entities such as bankers and debenture trustees, particularly in order to
conclusively establish and substantiate delays and defaults in debt servicing,
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where it is difficult to obtain written confirmation on holidays/ non-working
weekends.
3. In order to promote Ease of Doing Business and bring about uniformity in dealing
with rating reviews and publication of Press Release by CRAs, it has been decided
to modify the following paras of the Master Circular as below:
S. Timelines with existing as underlined Revised timelines in the existing
No. para
1. Clause 9.2.2:
CRAs shall publish on their website 7 working days
press release regarding the rating action
(including reiteration of existing rating), if
warranted, immediately, but not later
than 7 days of occurrence of the said
event.
2. Clause 9.3.3:
In case there have been delays in the 2 working days
payment of interest/ principal by the
Issuer, the Issuers shall state the same
in this statement and the CRA shall
promptly conduct a rating review and
disseminate the rating action through
Press Release within 2 days of receipt of
such statement.
3. Clause 11.3:
CRAs shall follow a uniform practice of 5 working days
three consecutive months of non-
submission of No-default Statement
(NDS) (or inability to validate timely debt
servicing through other sources) as a
ground for considering migrating the
ratings to INC and shall tag such ratings
as INC within a period of 7 days of three
consecutive months of non-submission
of NDS. The CRA in its judgement
may migrate a rating to the INC
category before the expiry of three
consecutive months of non-receipt of
NDS.
4. Clause 28.2.1:
In case no confirmation of servicing of 1 working day and 2 working days.
debt obligation by the Issuer is received
by the CRA from the Debenture Trustee
within 1 day post the due date, the CRA
shall immediately follow up with the
Issuer for confirmation of payment. In
case no response is received from the
Issuer within 2 days of such
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communication, the CRA shall issue a
Press Release as enlisted at para 28.4.3
and disseminate the same on its website
and to all stock exchanges where the
security is listed.
4. The circular shall be applicable with immediate effect.
5. This circular is issued with the approval of competent authority, in exercise of the
powers conferred by Section 11 (1) of Securities and Exchange Board of India
Act, 1992 read with the provisions of Regulation 20 of CRA Regulations to protect
the interest of investors in securities and to promote the development of, and to
regulate, the securities market.
6. This Circular is available on the website of the Securities and Exchange Board of
India at www.sebi.gov.in under the category “Legal” and under the drop down
“Circulars”.
Yours faithfully,
Sarika Kataria
Deputy General Manager
Department of Debt and Hybrid Securities
Tel No.022-2644-9411
Email ID - sarikak@sebi.gov.in
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