Didn't share India info with SEC: Fitch

FinMin alleged that Fitch gave lowest investment grade rating to India with a negative outlook in June last year after it shared India file with SEC

Fitch Ratings today denied the Indian government’s allegation that it shared confidential information about India with the Securities & Exchange Commission (SEC), which regulates the securities market in the US.

“Fitch did not share any confidential information about India with the SEC,” the ratings agency said in an e-mail response to Business Standard. It added that SEC had no influence on the rating given by Fitch to India last year. “Fitch is an independent rating agency, and no outside entity, including one of our regulators, has the ability to influence our ratings.”

Finance ministry officials had alleged Fitch gave the lowest investment-grade rating to India with a negative outlook in June 2012 after sharing its India file with SEC. The Indian government has reportedly taken up the matter with Fitch. The agency refused to comment on receiving the communication from India, saying it “does not publicly discuss any of our private communications with regulators or issuers”.

Finance Ministry officials had expressed displeasure that ratings can be influenced on non-technical considerations like political, economic or other vested interests by host country regulators under whose jurisdiction the rating agency is registered.

“The SEC had absolutely no influence on our rating of India. Fitch is an independent rating agency, and no outside entity, including one of our regulators, has the ability to influence our ratings," Fitch said.

India’s argument is that information relating to ratings on sovereigns cannot be treated similar to the information relating to ratings on commercial entities. It has warned that Fitch’s action would raise serious doubts in the minds of investors as well as rated entities about data confidentiality, impartiality, and independence of process.

Fitch Ratings was one of the three ratings agencies, together with Moody's and Standard & Poor's, first recognized by SEC as a nationally recognized statistical rating organization in 1975. It last visited India on April 12, 2013 for undertaking annual review of India’s sovereign debt rating. In June 2012, it had changed India’s rating outlook from ‘stable’ to ‘negative’.