NEW DELHI: The securities and exchange board of India (SEBI) updated rules for credit rating agencies (CRAs) by introducing “working days” as the standard for compliance deadlines, replacing the previous use of “days.”
The changes, announced in a circular on Tuesday, aim to standardise rating processes and publication protocols.
These updates followed recommendations from a working group on CRAs, highlighting the difficulties posed by calendar-based timelines, particularly during non-working days.
“One of the recommendations of the Working Group of CRAs for ease of doing business pertains to modification of approach on specifying timelines from ‘days’ to ‘working days’ in respect of certain requirements,” the market regulator stated in its circular.
Changes under the revised rules:
- Press releases on rating actions
CRAs must now publish press releases on rating actions within seven working days of the relevant event, replacing the earlier requirement of seven calendar days. - Delays in debt servicing
The timeline for reviewing ratings in cases of delays in debt servicing has been adjusted to two working days from the previous two calendar days. - ‘Issuer not cooperating’ tag
In case an issuer fails to submit a no-default statement (NDS) for three consecutive months, CRAs must now tag the ratings as “issuer not cooperating” within five working days, shortened from seven calendar days. Earlier, this duration was seven calendar days. - Debt servicing confirmation
For debt servicing confirmation, if no response is received within one working day after the due date, CRAs must promptly follow up and issue a press release within a stricter timeline of two working days.
The regulator emphasised that these changes are effective immediately and are intended to address operational inefficiencies for credit rating agencies.