Sebi, Ministry of Corporate Affairs plan to turn up heat on rating firms

Credit rating agencies may be told to follow norms set for bourses; move will change ownership structure

The Securities and Exchange Board of India (Sebi) and the Ministry of Corporate Affairs (MCA) are planning to change ownership and governance structures in credit rating agencies (CRAs), entities that provide an insight into the financial health of a company. The regulatory bodies are considering whether CRAs should be classified as market infrastructure institutions (MIIs), sources in the know of the matter said.
 
Systemically important institutions, such as stock exchanges, clearing corporations, and depositories, are considered as MIIs. If implemented, the move will have wide ramifications for CRAs, as none of them meets the criteria currently applicable for MIIs.