CRA regulations revised

Credit rating agencies (CRAs) may undertake rating of financial instruments, which fall under the purview of any other FSR, provided it shall comply with the regulatory framework, said SEBI

- PRESS TRUST OF INDIA

Security Exchange Board of India (SEBI) Wednesday proposed permitting credit rating agencies (CRAs) to undertake the rating of financial instruments that may come under other financial sector regulators, even if they have not issued any rating-related guidelines.

Under the current CRA regulations, credit rating agencies are only allowed to rate securities that are listed or proposed to be listed on a stock exchange recognised by SEBI.

However, the regulations do not stop CRAs from rating products, securities, or issuers if such ratings are done under the guidelines of another financial sector regulator or any authority specified by SEBI.

In its consultation paper, SEBI proposed that CRAs may be permitted to undertake activities that are not regulated by it, subject to certain conditions.