Sebi issues new guidelines to streamline operations of credit rating agencies

Current Context: India's Securities and Exchange Board of India (SEBI) issued new guidelines on 4th July 2024 to improve the functioning of credit rating agencies (CRAs) and make it easier for them to do business.

• These guidelines come into effect on August 1, 2024.
• Here's a quick rundown of the key changes:
• Clearer timelines for appeals: CRAs must now inform companies about their credit rating within one working day of the rating committee meeting. Companies have 3 working days to request a review or appeal the decision.
• Faster dissemination of information: Press releases about the rating decision must be published on the CRA's website and communicated to the stock exchange or debenture trustee within 7 working days of the meeting.

Question:

1 Under the new SEBI guidelines, how many working days do companies have to request a review or appeal the credit rating decision?

• A) 5 working days
• B) 3 working days
• C) 7 working days
• D) 10 working days

Answer: B) CRAs must now inform companies about their credit rating within one working day of the rating committee meeting. Companies have 3 working days to request a review or appeal the decision.