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TMI BlogIntroduction of Expected Loss (EL) based Rating Scale and Standardisation of Rating Scales Used by Credit Rating AgenciesX X X X Extracts X X X X X X X X Extracts X X X X ..... f Expected Loss (EL) based Rating Scale and Standardisation of Rating Scales Used by Credit Rating Agencies 1. SEBI, vide circular numbered CIR/MIRSD/4/2011 dated June 15, 2011 , had devised certain standardised rating symbols and their definitions used by the Credit Rating Agencies (CRAs). Further, SEBI vide circular numbered SEBI/ HO/ MIRSD/ DOS3/ CIR/ P/ 2019/ 70 dated June 13, 2019 had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e very low expected loss, over the life of the instrument EL 3 Instruments rated EL 3 are considered to have low expected loss, over the life of the instrument EL 4 Instruments rated EL 4 are considered to have moderate expected loss over the life of the instrument. EL 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l instruments under the guidelines of different financial sector regulators or authorities. 5. In order to standardise the usage of rating scales, CRAs are advised to align their rating scales with the rating scales prescribed under the guidelines of respective financial sector regulator or authority in terms of Regulation 9(f) of CRA Regulations, or in absence of the same, follow rating sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le with immediate effect except Section B above which comes into effect from April 01, 2022. 9. This circular is issued in exercise of the powers conferred by 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 , to protect the interest of investors in securities and to promote the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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