Sebi asks CRAs to disclose lists of non-cooperative issuers with them

The list would be disclosed in a prescribed format and the disclosure would be updated on a daily basis, Sebi said in a circular

With an aim to boost transparency, capital markets regulator Sebi on Monday asked credit rating agencies to disclose lists of issuers who are non-cooperative with them.

This comes after Sebi observed over the time the number of issuers that are non-cooperative with CRAs (Credit Rating Agencies) have increased, with a vast majority of INC issuers being unlisted and small entities.

In this regard, to provide enhanced transparency and information regarding non-cooperative issuers to various stakeholders, market participants and investors, Sebi said, "CRA shall disclose two lists of issuers who are non-cooperative with the CRA, separately for securities that are listed, or proposed to be listed, on a recognised stock exchange, and other ratings."

The list would be disclosed in a prescribed format and the disclosure would be updated on a daily basis, the Securities and Exchange Board of India (Sebi) said in a circular.

The new circular will be applicable with effect from July 15, 2023, it added.

Under the rules, every CRA has to carry out periodic reviews of all published ratings during the lifetime of the securities, unless the rating is withdrawn. However, in case a client does not cooperate with the CRA, the CRA is required to carry out the review on the basis of best available information or in the manner specified by Sebi.

Further, in such cases, CRAs are required to disclose that such ratings have been assigned based on the best available information.