SEBI tightens norms for credit rating agencies

The Securities and Exchange Board of India (SEBI) on 01st November 2016 tightened rules for credit rating agencies,prescribing more disclosures on suspension and withdrawal of ratings. The capital markets regulator also directed agencies to disclose the nature of their compensation arrangements with rated entities, including exchange of gifts.

CRISIL, ICRA and CARE are the major agencies that assign credit ratings to issuers of debt instruments. The SEBImove follows an increase in the number of defaults due to a deteriorating corporate debt profile.