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TMI BlogEnhanced Disclosures by CRAs and Norms on Rating WithdrawalX X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment of CRAs, the following changes are being suggested for disclosures made by CRAs. III. Applicability: This circular shall be applicable to credit ratings of securities that are listed, or proposed to be listed, on a recognized stock exchange, and other credit ratings that are required under various SEBI Regulations or circulars thereunder. IV. Methodology for Computation of Sharp Rating Action A. SEBI circular numbered SEBI/ HO/ MIRSD/ DOS3/ CIR/ P/ 2018/ 140 dated November 13, 2018 had inter alia mandated CRAs to furnish data on sharp rating actions in investment grade rating category, as per the format in Annexure A of the aforesaid circular, to Stock Exchanges and Depositories for disclosure on website on half-yearly basis. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imelines b) Current and past operational details including details about capex plans c) Debt obligations and repayment details d) Any other issue felt appropriate by credit rating agency as per internal assessment or as laid down by CRA in its internal policy/manual. ii. The criteria/ methodology in respect of assessing the risk of non-availability of information from the issuers including non-cooperative issuers. iii. The steps to be taken under various scenarios in order to ascertain the status of non-cooperation by the issuer company. C. CRAs shall follow a uniform practice of three consecutive months of non-submission of No-default Statement (NDS) (or inability to validate timely debt servicing through other sources) as a gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on a recognized stock exchange, it is proposed to revise withdrawal norms of ratings of such securities. Accordingly, a CRA may withdraw ratings of such securities provided that the CRA has: i. rated such security/ies continuously for 5 years; and ii. received an undertaking from the Issuer that a rating is available on such security/ies; and iii. received an undertaking from the other CRA(s) that a rating is available on such security/ies. VIII. Disclosure of Average Rating Transition Rates for Long-Term Credit Ratings A. SEBI circular numbered SEBI/ HO/ MIRSD/ DOS3/ CIR/ P/ 2018/ 140 dated November 13, 2018 has inter alia mandated CRAs to disclose a rating transition matrix, where the static pool has been defined to exclude rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pools. D. In the disclosure at C.(ii) above, a CRA shall include an additional column to indicate the proportion of ratings that were withdrawn during the financial year. IX. Enhanced Disclosures by CRAs A. In order to facilitate enhanced transparency and usability of disclosures made by CRAs on their websites, the following is proposed: i. Disclosures required by CRAs on their websites under various SEBI circulars should be provided in excel / machine readable format. ii. An archive of disclosures should be maintained by CRAs on their website, for at least 10 years. This also includes ratings press releases by CRAs. B. In addition to current disclosure on cumulative default rates (CDR) which includes non-cooperative issuers and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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