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Sebi directs credit rating agencies to up firewall with non-rating entities

The monitoring of the circular will be required to be done through half-yearly internal audits

Topics
SEBI | Credit rating agencies | credit rating

BS Reporter  |  Mumbai 

Sebi
Securities and Exchange Board of India (Sebi)

The (Sebi), on Wednesday, directed agencies (CRAs) to strengthen the firewall between them and their non-rating affiliates.

will now be required to formulate a policy on separation with non-rating entities and document the same in their internal operational manuals. Further, the nature and extent of sharing of infrastructure, employees, and resources between the CRA and the non-rating entity will be required to be specified.

Also, will ensure the independence of its credit-rating process in view of any such arrangements and provide guidance on sharing of resources by avoiding conflict of interest.

The regulator has said the new rules will come into effect from January 1, 2023. will have to report on their compliance within one quarter from the date of applicability of the circular.

The monitoring of the circular will be required to be done through half-yearly internal audits.

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First Published: Wed, September 21 2022. 21:40 IST
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