You are here: Home » Markets » News
Business Standard

MD, CEOs of rating agencies not to be members of rating committees: Sebi

In case the board is chaired by an executive director, half of the board shall comprise independent directors

Press Trust of India  |  New Delhi 

AAA ratings

The managing director and chief executive officers of shall not be members of their rating committee, on Monday said while putting in place norms for enhanced governance and accountability of

Rating committees of (CRA) shall report to a chief ratings officer, said in a circular.

Regarding composition of board of directors of a CRA, said one-third of the board shall comprise independent directors if it is chaired by a non-executive director.

In case the board is chaired by an executive director, half of the board shall comprise independent directors.

The board of a CRA shall constitute Ratings Sub Committee and Nomination and Remuneration Committee and the latter shall be chaired by an independent director, the regulator said.

The chief ratings officer has been asked to directly report to the ratings sub-committee of the board of the CRA.

Additionally, Sebi has asked the CRAs to meet the audit committee of the rated entity at least once in a year to discuss issues including related-party transactions, internal financial control and other material disclosures made by the management which have a bearing on rating of the listed non-convertible debentures.

First Published: Mon, November 04 2019. 20:15 IST
RECOMMENDED FOR YOU