The Securities Exchange Board of India (“SEBI”), in exercise of powers conferred under Section 11 (1) of Securities and Exchange Board of India Act, 1992 read with the provisions of Regulation 20 of SEBI (Credit Rating Agencies) Regulations, 1999 vide Circular No. SEBI/HO/DDHS/DDHS-PoD-3/P/CIR/2025/002[1], dated January 07, 2025, revised certain timelines for rating reviews and publication of press release by Credit Rating Agencies (“CRAs”). The provisions laid down hereunder shall come into effect immediately.
Chapter II and III of SEBI’s Master Circular No. SEBI/HO/DDHS/DDHS-POD3/P/CIR/2024/47 dated May 16, 2024, (“Master Circular”), regarding CRAs has been modified, as it prescribes certain timelines to be followed by CRAs for review of ratings and publication of press releases.
The Working Group on Ease of Doing Business (“WG”) gave the following recommendations to promote ease of doing business and bring uniformity for CRAs:
(a) Modification of timelines from “days” to “working days” for specific requirements in the Master Circular.
(b) Further, the WG provided a process flow to comply with the relevant requirements within existing timelines, as the CRAs rely on external entities, such as bankers and debenture trustees, to confirm delays and defaults in debt servicing, where obtaining written confirmation on holidays or non-working weekends is difficult.
Accordingly, the following paragraphs of the Master Circular have been modified:
| Sl. No. | Provisions with the existing timelines | Revised Timelines |
| 1. | Clause 9.2.2 of the Master Circular requires the CRAs publish on their website, the press release regarding the rating action (including reiteration of existing rating), if warranted, immediately, but not later than 7 (seven) days of occurrence of the said event. | 7 (seven) Working Days |
| 2. | Clause 9.3.3 of the Master Circular requires that if an issuer delays payment of interest or principal, they must disclose the delay in their statement. Subsequently, the CRAs shall promptly conduct a rating review and disseminate the same through a press release, detailing the rating action within 2 (two) days of receiving the issuer’s statement. | 2 (two) Working Days |
| 3. | Clause 11.3 of the Master Circular requires that in the event a CRA does not receive a No-default Statement (NDS) for 3 (three) consecutive months or is unable to confirm timely debt servicing through other sources, the CRA shall consider migrating the rating to the ‘Issuer Not Cooperating’ (“INC”) category. The CRA shall tag the rating as INC within 7 (seven) days of the 3 (three) month period. However, the CRA may even choose to migrate the rating to the INC category before the end of the 3 (three) month period. | 5 (five) Working Days |
| 4. | Clause 28.2.1 states that in the event a CRA does not receive confirmation of servicing of debt obligation from the debenture trustee within 1 (one) day after the due date, the CRA shall promptly follow up with the issuer for payment confirmation. Consequently, if the issuer does not respond within 2 (two) days, the CRA shall be required to issue a press release as detailed in paragraph 28.4.3 of the Master Circular and disseminate the same on their website and to all stock exchanges where the security has been listed. | 1 (one) Working day and 2 (two) Working days, respectively. |
[1] https://www.sebi.gov.in/legal/circulars/jan-2025/measures-for-ease-of-doing-business-for-credit-rating-agencies-cras-timelines_90618.html