SEBI has proposed allowing credit rating agencies to rate financial products regulated by bodies like RBI or IRDAI, provided they comply with respective norms and maintain structural separation within their operations.
India’s securities market regulator has proposed that credit rating agencies (CRAs) be allowed to rate financial products and instruments overseen by other financial sector regulators.The rating firms may undertake such business, provided they comply with the rules of the respective regulator—such as the Reserve Bank of India (RBI), Insurance Regulatory and Development Authority of India (IRDAI), or Pension Fund Regulatory and Development Authority (PFRDA)—the Securities and Exchange Board of India (SEBI) said in a discussion paper published on its website on Wednesday.
SEBI clarified that CRAs may only undertake rating activities that are fee-based and non-fund based.
Such non-core business may be carried out by creating a separate business unit within the CRA and ensuring a proper ‘Chinese wall’ between the core and non-core verticals, the regulator noted.Also read: SEBI study: Retail traders lose over ₹1 lakh crore in FY25 on derivatives bets
SEBI clarified that CRAs may only undertake rating activities that are fee-based and non-fund based.
Such non-core business may be carried out by creating a separate business unit within the CRA and ensuring a proper ‘Chinese wall’ between the core and non-core verticals, the regulator noted.Also read: SEBI study: Retail traders lose over ₹1 lakh crore in FY25 on derivatives bets
SEBI has sought public comments on the discussion paper by July 30.
(Edited by : Shersh Kapoor)
