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

The Securities and Exchange Board of India (Sebi), on Wednesday, directed credit rating agencies (CRAs) to strengthen the firewall between them and their non-rating affiliates.
 

CRAs 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, Sebi 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